BC SECTORLEARNINGS
Saved by @SAnngeri

In a business where the buying & selling price is fixed by the government, how is that the sugar stocks are rallying so much?

A thread 🧵 to learn how the sugar sector works. Do re-tweet and hence us educate more investors (1/n)

 - Sugar is made out of Sugarcane
- The government fixes buying price (FRP – Fair & Remunerative price) for the mill from the farmers at 2.850/Kg
- Selling price is also fixed at Rs. 31/Kg (MSP – Minimum selling price) (2/n)
Lets understand the sector,

- Sugarcane purchased by the mill is crushed to remove the juice (exactly like you have sugarcane juice at a hotel)
- Juice is heated & boiled to remove sugar (3/n)
- The juice can be boiled upto 3 times to remove sugar. Each time it is boiled, sugar is removed, than some water is added and boiled again to remove more sugar (4/n)
- There are 2 by-products as well. The residue left behind after the boiling process is over is like a gum/paste called molasses & the fiber/stem of the sugarcane after juice is extracted (5/n)
-U can either directly convert the juice into molasses without extracting sugar so that U can produce more molasses or boil the juice twice, extract sugar & use the remaining juice 2 extract molasses (B Molasses) or burn the juice 3 times & extract the molasses (C Molasses) (6/n)
Sugar industry deals in 3 products,
-Sugar
-Molasses can be further processed to make Ethanol & Alcohol
-The fiber is burned to generate electricity. Sugar mills use the same electricity for running the mill & extra is sold. This is called co-generation (7/n)
Rough calculations,

1 Tonne of sugarcane roughly can produce
- 110 Kg of sugar (or)
- 70 L of Ethanol
You produce 1.6 times more sugar than Ethanol from 1Tonne of sugarcane.

& Sugar mills rough business split is,
60-65% sugar, 20-25% ethanol, 10-15% co generation (8/n)
What should the mill focus on producing depends on the rate of sugar or Ethanol. Sugar currently is 31/kg & ethanol is 62.65. So 1 tonne of sugarcane can generate the below revenue
-Sugar = 31*110 = 3410
-Ethanol – 70*62.65 = 4385.5 (9/n)
So what should they produce more? Ethanol

So why are they even producing sugar?
Ethanol production needs a proper distillery set up which not all mills have. Mills are now investing for the same. (10/n)
Why are stocks going up?
- Demand & Supply
- Exports
- Ethanol
- Working Capital (11/n)
Demand & Supply (12/n)
Exports (13/n)
Ethanol (14/n)
Working Capital

Working capital to get better with more focus on Ethanol as payments from OMC happen monthly vs selling sugar which take 7-9 months of inventory time where as the farmers have to be paid in 14 days after acquiring the crop from them (15/n)
What to look for in a sugar company?

- UP based companies to do well. Water is available for cultivation, crop is also good & hence the factory capacity utilization is better & sugar produce per tonne is more
- Ethanol capacity/Tonne of crop crushed
- Working capital (16/n)
Cant end this thread without crediting @varinder_bansal for a very good video on sugar sector from where I have taken the latest data for the thread. You can watch the entire episode here -https://t.co/kDtnHmzL98 (17/n)
I have written multiple threads earlier on
- Sector Analysis - Banking, Paints, Logistic, REIT, InvIT
- Macro Economics
- Debt Markets
- Equity Markets
- Gold
- Personal Finance etc.

You can find them all in the link below 👇 (**END**)

https://t.co/UrRt87OLLF

More from Kirtan A Shah

Kirtan A Shah
Kirtan A Shah
@KirtanShahCFP
A basic premier on the banking sector, demystifying commonly used terms,
CASA
Wholesale Banking
Net Interest Income (NII)
Cost of Liability
Advances Growth
Gross v/s Net NPA
Provisions
SLR/CRR
Capital Adequacy Ratio
Net Interest Margin (NIM)

Do hit the 're-tweet' (1/n)

Banking, as a business is simple to understand, you borrow money (liability for the bank as the bank needs to pay back) and lend (asset for the bank as the bank is expected to receive it bank), the difference between the borrowings & lending is banks income (2/n)

Where all can they borrow from?

(a) Savings Account (SA)
(b) Current Account (CA)
(c) Fixed Deposit (FD)
(d) Recurring Deposit (RD)
(e) Certificate of Deposits (CD)
(f) Bonds etc. (3/n)

Whom do they lend?
(a) Retail - Housing loan, auto loan, personal loan etc.
(b) Wholesale (Institutional Lending) – Commercial Papers (CP) & other Corporate Loans

P.S. – “HDFC Bank is now increasing focus on wholesale lending”, hope you now understand what that means (4/n)

How does the bank profit?

So lets say the average borrowing cost of the bank (also know as the cost of liabilities) is 4.54% & average lending cost is 8.54%, the difference 8.54% - 4.54% = 4% is called the Net Interest Income (NII). HDFC Banks Cost of Liability is 4.54% (5/n)
SECTORLEARNINGS , SECTOR KNOWLEDGE
Kirtan A Shah
Kirtan A Shah
@KirtanShahCFP
Here’s a compilation of Personal Finance threads I have written so far. Thank you for motivating me to do it.

Hit the 're-tweet' and help us educated more investors

Yes Bank’s additional Tier 1 bonds, written off. Lakshmi Villas Banks Tier 2 bonds, written off. Understand what & why of ATI and Tier 2 bonds in this thread.

https://t.co/VBmV2dwpPn (1/n)


'Floating Rate Funds' - A case for debt investing in the current interest rate situation


Fixed Income investment strategies

It’s a misconception that FD, RBI Bond, PPF etc have no risk. The reason we don’t see the risk in them is because for us, risk ONLY means loss of capital.


Index Funds v/s ETFs

While index funds and ETF’s look similar, there are multiple differences you need to keep in mind before investing in either of them. Let me highlight the important ones
ALL , MF AMP PERSONAL FINANCE
Advertisement
Kirtan A Shah
Kirtan A Shah
@KirtanShahCFP
Last Akshay Tritiya, had written the below thread 🧵 on which is the best way to buy gold, Physical, Digital, ETF or Sovereign Gold Bond and why?

Do re-tweet and help us educate more retail investors

#investing
GOLD
Kirtan A Shah
Kirtan A Shah
@KirtanShahCFP
Is US going to default on its debt?

This 🧵 will surely help you understand. Do ‘re-tweet’ & help us educated investors (1/13)


How does a country run?

Assume a country to be like a company, which has income & expenses. Income source can be tax collections & expense can be government employee salaries, defence sending’s, social security schemes etc. (2/13)

Generally, most economies are running a deficit; their income is less than expense. So if your income is 100 and expense is 105, where do you get the 5? You borrow!

Similarly US has been borrowing & the total debt today roughly stands at a whooping $28.5T. (3/13)

Deficit in the last 2 years has gone up significantly because of COVID + the government wants to spend more; a $3.5T spending package is what they are trying to get an approval for + older debt is coming up for maturity (4/13)


Okay, so I am saying they will raise more debt for the deficit of COVID, the new package & paying older debt off?

Ideally a yes but they are not allowed to borrow more! (5/13)
WOULDUSDEFAULT
Kirtan A Shah
Kirtan A Shah
@kirtan0810
Market PE at 40 and yet the market is not falling, why? Getting asked this question multiple times. Here's a thread covering ‘very basic’ premier on valuation for my retail investor friends.

Do hit the ‘re-tweet’ and help us educate more investors (1/n)


For us to be able to comprehend the situation, we need to understand 4 very basic valuation matrixes
(1) Trailing EPS
(2) Forward EPS
(3) Trailing PE
(4) Forward PE

Formula

EPS = Profit After Tax / Number of outstanding Shares
PE = Market Price / EPS (2/n)

So what's a trailing EPS?

So in March 2020, RIL generated a Profit after tax (PAT) of 39,354 cr. The number of outstanding shares of RIL is some 676.21 cr. which means the 39,354 cr of PAT belongs to the 676.21 cr. shareholders, right? (3/n)

That also means that per share, RIL earned Rs. 58.20 (39,354/676.21). This 58.20 is called the trailing (TTM) EPS. Trailing means past, already done. (4/n)


So RIL earns 58.20 rupees per share but you pay 58.20 * 33.16 = 1930, 33.16 times more to buy 1 share from the market, that 33.16 is called the Price/Earnings (PE) ratio. This is again trailing as 58.20 EPS is trailing. (5/n)
INVESTING , MARKET LEARNINGS , INVESTING KNOWLEDGE

More from Sectorlearnings

Kirtan A Shah
Kirtan A Shah
@KirtanShahCFP
(Thread) With Kotak launching its International REIT Fund of Fund NFO, it is worth revisiting our old thread on Real Estate Investment Trust (#REIT). The Idea is to educate readers on REIT & share our view on the Kotak #NFO

Do ‘re-tweet’ & help us educate more investors (1/n)

What’s a REIT?

Lets say I am a RE developer, K Raheja. I like a land in Mumbai & Hyderabad 4 some commercial development. I decide to buy it. Where will I get the monies 2 buy & construct it?
1. Self
2. Bank, NBFC, MF - Debt
3. Partner – someone else investing as Equity (2/n)

So I invest some monies, got some 4m banks & MF’s & I also got Blackrock to invest 2 buy the land & make the business park called 'Mindspace'. I constructed around 23-mn sq ft with multiple building & I started leasing them out to companies who wanted rented office premises (3/n)

There comes a point where I needed more monies to build new building, pay off the loans etc., where do I get the monies? So I decide to do an #IPO. Not of the entire company K Raheja but only this project called Mindspace. So I formed a trust or corporation (4/n)

I commit to payout 90% of my rent income to the shareholders proportionately as dividends & I will use this IPO money to invest a minimum 80% in completed real estate, which is generating rent & will use 20% in constructing new Real Estate or lend to some other developer (5/n)
SECTORLEARNINGS
Aditya Shah
Aditya Shah
@AdityaD_Shah
So many terminologies in Banking!

Confused?😥🤔

Dont worry.

A thread🧵 on basics of Banking

Hit "Retweet" to educate Maximum Investors

Lets go👇

(1/20)

Types of banks:-

Your money should be parked in scheduled commercial Banks

Scheduled Commercial Banks
-PSU Banks
-Private Banks
-Foreign Banks
-Small Finance Banks

Do not park money is Co-operative/Regional Banks

List is shown below

(2/20)


NPA, NPA, NPA! Kya hain yeh NPA?🤔

Gross NPA (GNPA)-

It is the total loans on which no payment has been paid for 90 days or more.
GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances.

(3/20)

Net NPA (NNPA)-

The total figure left after deducting provisions made for bad loans from GNPA.
(GNPA – Provisions+upgrades/writeoffs = NNPA)

(4/20)

Special Mention Account (SMA) –

SMA-0

SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days.

(5/20)
SECTORLEARNINGS , ALL , BANKING LEARNINGS
Advertisement
Vivek Mashrani, CFA
Vivek Mashrani, CFA
@MashraniVivek
🚀

If you find megatrends early, it could be highly rewarding...

If you want to refresh powerful concepts of Chemical Sector...

This is must watch for you...

One of the most in-depth analysis on the sector you will ever see..!!

#investing
SECTORLEARNINGS
Kirtan A Shah
Kirtan A Shah
@KirtanShahCFP
After writing on Banking & Paints, this thread focuses on the 'Logistic Sector'. Idea is to give a small start to the retail investors looking at investing in this space from where they can build on.

This thread covers,
- Macro
- Business Model
- 3PL & 4PL
- Valuation (1/n)

Logistics business macro

-14% of India’s GDP is spent on Logistic
-Organized market is 42%
-Growing at 10-15%
-Employs 2.2 cr
-Achieved Infrastructure status
-FY 14-18 attracted 1,00,000 cr FDI (2/n)

What’s the business?

Logistic is traditionally seen as a warehousing & transportation business where goods, needs 2b transported 4m point A to B using Road, Rail, Ship or Air & can be stored at multiple warehouses before the consumer receives the product (3/n)

The business landscape is changing fast with newer competition and technology is challenging the older business models. 3PL (3rd party logistics) & 4PL is one such change in the business of logistics, will discuss about the same ahead. (4/n)

Listed companies involved in the business may or largely may not own the Trucks, Rails, Aircraft, Ships, Warehouses etc., but uses outsourced services of other vendors and the listed companies manage the logistics from point A to point B (5/n)
SECTORLEARNINGS
Saket Mehrotra \U0001f60e\u2615\U0001f4b0
Saket Mehrotra 😎☕💰...
@mehrotra_saket
For almost seven years, I have tracked the hotels space very closely.

While everyone wants to jump on the 'unlock trade' bandwagon, I do not feel it's a great idea because the business model in itself is a little flawed.

Here's a thread 👇 (1/n)

Let's first start with the industry overview.
The whole industry works on one and one thing only. Revenues. (Let's call this A)

Are you capable of charging higher Revenues from your customers on a regular basis?

Are you able to maintain your Revenues if not increase them? (2/n)

Why is this relevant?
Well, think of a regular business selling goods / services.
Typically, when you're not able to sell something, you keep it for the next day or hold it in your 'inventory'.
Typically you have a certain level of demand estimation before you manufacture(3/n)

Whether you manufacture a product or sell a service, you do a certain degree of demand planning.

In the context of hotels, this would be based on the location, the demand of tourist arrivals and accordingly the number of keys (hotel rooms).

(4/n)

The only catch here is the fact that you only have a 24 hour window to sell a day's inventory.

Taj Mahal Palace in Mumbai only has a 24 hour window on a daily basis to sell 560 room nights.

Once the day gets expired, the inventory is gone. (5/n)
SECTORLEARNINGS

You May Also Like

Vibhor Varshney
Vibhor Varshney
@nakulvibhor
On the occasion of youtube 20k and Twitter 70k members

A small tribute/gift to members

Screeners

technical screeners - intraday and positional both

before proceeding - i have helped you , can i ask you so that it can help someone else too

thank you

positional one

run - find #stock - draw chart - find levels

1- Stocks closing daily 2% up from 5 days
https://t.co/gTZrYY3Nht

2- Weekly breakout
https://t.co/1f4ahEolYB

3- Breakouts in short term
https://t.co/BI4h0CdgO2

4- Bullish from last 5

intraday screeners

5- 15 minute Stock Breakouts
https://t.co/9eAo82iuNv

6- Intraday Buying seen in the past 15 minutes
https://t.co/XqAJKhLB5G

7- Stocks trading near day's high on 5 min chart with volume BO intraday
https://t.co/flHmm6QXmo

Thank you
SCREENERS , ALL , NAKULSMIX
John Myles White
John Myles White
@johnmyleswhite
This post is pretty bizarre, but it manages to hit on so many false beliefs that I've seen hurt junior data scientists that it deserves some explicit

(1) The notion that R is well-suited to "building web applications" seems totally out of left field. I don't feel like most R loyalists think this is a good idea, but it's worth calling out that no normal company will be glad you wrote your entire web app in R.

(2) It is true that Python had some issues historically with the 2-to-3 transition, but it's not such a big deal these days. On the flip side, I have found interesting R code that doesn't run in modern R interpreters because of changes in core operations (e.g. assignment syntax).

(3) "Most of the time we only need a latest, working interpreter with the latest packages to run the code" -- this is where things get real and reveal some things that hurt data scientists. If this sentence is true, it's likely because you don't share code with coworkers.

(3) Really is a broader issue in data science: people only think of what they need to do their work if no one else existed and code was never maintained. Junior data scientists almost always operate on projects they start from scratch and don't have to maintain for long.
DATA SCIENCE
Advertisement
Jaya_Upadhyaya
Jaya_Upadhyaya
@Jayalko1
BANASHANKARI AMMA, NEAR BADAMI (KAR)
#bharatmandir #navratri2021

Originally built by Chalukyas in 7th century. Devi Banashankari was their family deity. This image of Banashankari Amma was installed by Jagadekamalla I in 630 AD.

Later renovations were done by Marathas.


Once, a demon Durgamasur was troubling the people of this area. Answering the prayers of Devas, Ma Parvati emerged from the yajna fire as Banashankari and killed Durgamasur.
This area has rich forests of coconut, betel nut and other trees.
@GunduHuDuGa


It is said that during a severe famine, Devi provided vegetables and fruits to the people of this area.
Hence, she is also worshipped here as Shakambhari.
In the annual festival called Banashankari jatre, a Rath yatra takes place and Devi moves around the city in the chariot.
ALL
Aditya Todmal
Aditya Todmal
@AdityaTodmal
A Thread on the Boss himself @Mitesh_Engr

Mitesh Sir's Positional Option Selling 101:

• How to find direction
• Which options to sell
• How to deploy capital
• Exit criteria
• What ROI he targets weekly
• What % risk he takes

Done with the help of @niki_poojary


How @Mitesh_Engr Sir finds the direction?

• Daily charts S/R
• 75 min charts S/R
• Intraday trend
• Always play directional
• Never trades in strategies


Which options to sell in weekly expiry according to @Mitesh_Engr?

• Weekly candle High/Low
• Sell 1% away options from those
• Exit when levels breached


Position Sizing by @Mitesh_Engr Sir.

How to deploy your capital?

• First sell 20%
• Pyramid the next day
• When to exit
• What to do when view goes wrong
• What to do with idle capital


Some important tweets of @Mitesh_Engr Sir

• What Data to look at
• ROI for safe players per month
• Max risk per day
• Gather knowledge and play directional
• Never play strategies
OPTIONS LEARNING , ALL , MPLEARNINGS
Patrick McKenzie
Patrick McKenzie
@patio11
Some people really benefit from hearing advice that everyone knows, for the same reason we keep schools open despite every subject in them having been taught before.

In that spirit, here's some quick Things Many People Find Too Obvious To Have Told You Already.

Your idea is not valuable, at all. All value is in the execution. You think you are an exception; you are not. You should not insist on an NDA to talk about it; nobody serious will engage in contract review over an idea, and this will mark you as clueless.

Technologists tend to severely underestimate the difficulty and expense of creating software, especially at companies which do not have fully staffed industry leading engineering teams ("because software is so easy there, amirite guys?")

Charge more. Charge more still. Go on.

The press is a lossy and biased compression of events in the actual world, and is singularly consumed with its own rituals, status games, and incentives. The news necessarily fails to capture almost everything which happened yesterday. What it says is important usually isn't.

Companies find it incredibly hard to reliably staff positions with hard-working generalists who operate autonomously and have high risk tolerances. This is not the modal employee, including at places which are justifiably proud of the skill/diligence/etc of their employees.
TECH