Once in a while one should study the company which lacked the execution, which always over-promised and under delivered. Check how market valued it over the period of time. As it gives us the framework to avoid potential capital allocation mistakes i future. 🧪⚗️

#Privy Speciality Chemical - Superior Business Model ?

A Detailed Thread 🧵🧵

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Price : ₹ 1986 🌹🥀

1. Privi started manufacturing in 1992 with only two products, now having more than 50 products manufacturing at Mahad and Gujrat facilities.

2. India's leading manufacturer, supplier and exporter of aroma and fragrance chemicals.

3. Privi has developed a backward integrated value chain and manufactures value-added products from the waste generated during the manufacturing process

Management

Industry Outlook
1. Aroma chemicals which form the building blocks of the F & F industry is a size of about USD 5.5bn. This multi-billion-dollar industry impacts daily life for consumers worldwide, often on multiple fronts: From the toothpaste we use, to the coffee, tea,

Clinical Trial Process | A Thread🧵

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We have discussed the drug discovery process in a previous 🧵. In this 🧵 we will attempt to shed some light on the clinical trials process to enhance our understanding of the drug discovery process

Topics Covered :
1. What are clinical trials
2. Why are they conducted
3. Phase 0 Trials
4. Phase 1 Trials
5. Types of studies in Phase 1
6. Phase 2 Trials
7. Phase 3 Trials
8. Filing of NDA
9. Phase 4 Trials
10. Success rates

1. What are clinical trials ?
A type of research study that tests how well new medical approaches work in people. These studies test new methods of screening, prevention, diagnosis, or treatment of a disease. Before doing a clinical trial, investigators conduct preclinical

research using human cell cultures or animal models. For example, they might test whether a new medication is toxic to a small sample of human cells in a laboratory.

2. Why are they conducted ?
Clinical trials are conducted to evaluate if a drug is safe for consumption by

human beings and if it is actually effective in curing or preventing a medical condition or disease. Keep in mind, this will be the first time that the drug will be tested on human beings.

3. Phase 0 trials
Phase 0 trials are also known as human micro-dosing study.

#MTAR Technologies - Leader in Niche Precision Engineering 🛩️🛩️

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CMP - ₹ 1803

1. Company Overview

MTAR Technologies is a leader in the precision engineering industry. They serve clients in the Defence, Space, Nuclear and Clean Energy industries. The company is engaged in the manufacture of

mission-critical precision assemblies and components with close tolerance levels of 5-10 microns.

2. Business Segments

The company operates in 4 segments: Nuclear, Defence, Space and Clean Energy.

Nuclear: In the Nuclear Segment, the company is partnered with Nuclear

Power Corporation of India Limited (NPCIL) which controls all operational, under construction and planned reactors in the country given India does not allow private participation. They manufacture products which are highly critical to the functioning of nuclear reactors.

They have 14 kinds of products with a wide range of applications.

Defence: In this segment, the company has undertaken complex assemblies for the DRDO, such as the base shroud assembly for Agni missiles and the assembly of Secondary Injection Thrust Vector Control (SITVC)

Unique Business Model
#Tipsindustries

CMP- Rs 1296

A Thread 🧵

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@NeilBahal

Topis covered:
1. Tips Industries Overview
2.Music Segment
3.Monetization
4. Tips Business Model
5.Acquisition Cost
6. Tips Film Business
7. Tips YouTube

8. Why Should Artists Choose Tips Over Other Labels?
9.Financials
10.Future Growth
11.Content Acquisition
12. Conclusion

1. Tips Industries Overview
It was founded by Kumar S. Taurani and Ramesh S. Taurani in 1975.
In 1975, the Taurani brothers used to trade

in LP’s (Long Playing Phonograph Records) for three of the biggest companies in India – HMV, Music India & CBS. By 1977, they had become the biggest dealers for these companies in Western India.
Driven by the ambition of both the brothers started their own record label.

TIPS Industries Limited is a leading Indian music label which creates and monetises music. Apart from music segment it is also into Film Production,Film Distribution & Film Promotion

2. Music Segment
Tips has an extensive catalog of film, non-film, devotional, pop & remixes

Tips has a library with more than 29,000 songs, Tips has a very fresh catalog with songs released in 2000 and most major hits of the 90s. Tips has a major Atif Aslam Library.

3. Monetization
Tips monetizes its songs just like other music labels i.e through distribution deals

@BrianFeroldi Agree- but isn’t equally silly to assume near 100% probability of achieving full TAM potential at peak operating margins and peak multiples in say 2035?

@patrick_oshag A DCF doesn't require use of a spreadsheet. It also doesn't require complex assumptions.

Buffett does the DCF in his head. A unit economics analysis is a DCF done bottoms up . LTV/CBCV can also be calculated in someone's head or roughly "eyeballed" based on pattern recognition.

@Dharmicsaint You can find

Accidents happens when one doesn't look at valuations.

A supposedly platform stock listed in 2019. OFS price was 320 Rs. High of 6396 made yesterday.

Mcap crossed 1 lac crore.

Company was affected by CoVid so will talk a bit on pre-CoVid nos.

1/3

Sales of 2300 cr in FY20. NP 730 cr. Company has a monopoly given by the govt. Business is good and many extensions taking place, which will take time to bear fruit, if at all. But valuation-wise it had gone bonkers.

2/3

Stock corrected 40%+ in 2 days. This is what can happen when one doesn't heed valuations. And ignores the risks to the business. And only looks at blue sky scenario.

A good company may not be a good investment, at any price.

3/3

VALUATION MULTIPLES FROM FIRST PRINCIPLES

• There is a lot of misunderstanding & misapplication of valuation multiples, both among retail and institutional investors
• Get clarity on this by revisiting the 1st principles here

Prerequisites:
• Finance 101 knowledge

THREAD 👇

KEY CONCEPT: VALUE STAKEHOLDERS
"Beauty is in the eye of the beholder"
"Value is in the rights of the user"
So it is important to ask, "VALUE TO WHOM?"

There are 2 main types of stakeholders in a company:
1. Equity holders
2. Lenders

KEY CONCEPTS: MCAP and EV

Value to equity holders is represented by the Market Capitalization (MCAP).

Value to equity AND lenders is represented by Enterprise Value (EV):

Notice how you can convert between Enterprise Value to Market Capitalization easily

KEY CONCEPT: FCFF

Free cash flow to the firm (FCFF) = Cash flows available for distribution to both equity holders AND lenders

Related:
Free cash flow to equity (FCFE) = Cash flows available for distribution to ONLY the equity holders

We will focus on EV & FCFF in the examples

KEY CONCEPT: FUNDAMENTAL VALUE OF A COMPANY

The fundamental/intrinsic value of a company is equal to the present value of the cash flows it would generate in future.

The growing perpetuity expression of value is shown below: