Bazaar

A defense company that went through a roller coaster in the stock market when it initially launched, we talk about Paras Defense in this episode. Why it has potential, and what are its shortcomings, we discuss this and more.

Blog discussed - https://blog.sid.business/p/betting-on-space-part-3?utm_campaign=post&utm_medium=web

Delving more into mid-cap companies, we talk about MTAR in today's episode. It's strengths and weaknesses, we talk about this and more.

Stocks discussed: MTARTECH

Blog discussed - https://blog.sid.business/p/betting-on-space-part-2

In this episode, I explored the future potential of CRISPR Therapeutics and the gene editing industry in general. Gene editing is an exciting [and scary] technology which is slowly giving humans the ability to create artificial life, also known as Synthetic Biology. I believe it's going to change the way we live and investors should close watch the developments in this space.

Companies discussed on this episode : CRSP, NVDA, TWST, VRTX

Unless you've been living under a rock or trapped on an island, you probably know that the Crypto space is CRASHING hard over the past few months. A lot of crypto exchanges/lenders have filed for bankruptcy. The shares of Coinbase, one of the largest exchanges in the world is down more than 70%. Bitcoin has fallen quite substantially.

Winter has come in the world of Cryptos.

In this episode, we try to answer what happened that triggered this winter & how long this self-induced winter is going to last.

(00:00): Summary of events in the historical crash in the Cryptosphere

(04:19): Events that triggered the so called ‘Crypto Winter’

(10:17): Destruction of the LUNA/TERRA ecosystem : the fall of the first domino

(24:33): Why you should not trust anyone who pays you Fixed Annualized Interest of 20%

(25:54): The RED FLAGS you should look for

(31:36): How long will this Winter last?

Did you like this episode? Drop us a rating, share it in your circle & let us know what you think at thebazaarpodcast@gmail.com

In this episode, I invited Utsav Mukherjee & we discussed about the proposed amendments in the E-commerce rules & it's impact on E-commerce players like Amazon/Flipkart, sellers on those platforms & the economy in general.

In this episode, we spoke about Sona BLW Precisions Forgings - an auto component maker, which significant exposure to the EV market.

We spoke about the history of the company, the competitive advantages, red flags, financials & whether the valuations of the company were justified.

Want us to cover a specific stock? Reach out to us at thebazaarpodcast@gmail.com or hit me up on https://twitter.com/siddybeee

In the final episode of our series on Textiles, we spoke about Alok Industries & Trident.

Alok Industries is a classic example of what happens when you over-invest and over-produce in the textiles industry. Trident on the other hand is a shining example of sustainability in the fashion industry.

Would you like us to cover a specific stock? Shoot out a mail to us at thebazaarpodcast@gmail.com or https://twitter.com/siddybeee

In this episode, Aman & I covered ground on two companies - Raymonds & Page Industries.

We covered the history of these companies, their growth drivers, the challenges posed by COVID-19 for textile industry in general and the stock performance.

Do you want us to do more stock coverage shows? Reach out to us at thebazaarpodcast@gmail.com

In this episode, we touched base on certain characteristics of the textile industry and how the entire eco-system works starting from spinning a yarn to stitching the fabric for making the final product.

We also spoke about why companies get listed on the stock exchanges - and some of it's pros & cons.

If you're looking to get into the Fashion industry, follow TexWired - https://open.spotify.com/show/4rFdQBwgUxLkS4LB4WFnNV

You can reach out to us at https://twitter.com/siddybeee

Bitcoin, Ethereum & Dogecoin.

I'm sure you've heard these names at some point in the last year or so. These are the 3 most famous cryptos at the moment. Bitcoin, being the first Cryptocurrency, Ethereum being the crypto that powered smart contracts & you know how Dogecoin got famous.

In this episode, we spoke about some other Cryptos - i.e. Cardano, Ripple, VeChain, Polkadot & COTI. We spoke about the different use cases of these cryptos and the networks they are powering.

We also covered some risks of putting your money into Cryptos and why you should be extra cautious before taking such a decision.

Have a topic you'd like us to cover? Hit me at up https://twitter.com/siddybeee

Cryptocurrencies like Bitcoin, Dogecoin & Ethereum among others - have really been on a tear for the past two years. And, a lot of people continue to make their entry in the world of Cryptos.

But, before you take a deep dive into this exciting new asset - there are quite a few jargons that you should know about. I invited Anmol Gandhi & we demystified several technical terms. We also spoke about how a normal person can indulge in mining using a simple laptop. And, we discussed on the potential impact of the Coinbase listing & how it could help put Cryptos on the map!

You can read our blog on this topic for a deeper analysis - https://thebazaar.substack.com/p/demystifying-cryptocurrencies-and

And, we would love to know what to know what you think of the show. Hit me up at https://twitter.com/siddybeee 

The Government of India recently notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 - and it’s going to have major implications on the Media & Entertainment industry going forward. 

I invited Utsav & we spoke about the key changes introduced by these IT rules and the implications it would have on the Media & Entertainment industry. We spoke about certain controversial aspects - like 'tracing of original source of information' and how it could violate privacy. 

You can read our blog on this topic at https://thebazaar.substack.com/p/the-new-it-rules-boon-or-bane. And, we would love to know what to know what you think of the show. Hit me up at https://twitter.com/siddybeee

Easy Trip Planners - an Online Travel Agent (OTA) which makes most of it's money from airline ticket sales - is coming out with an IPO. On the final day, the issue was oversubscribed by around 159 times. Not surprising, since this Company is commanding a grey market premium of 80%.

We evaluated the Company based on several parameters to see if it can withstand the test of time. 

Parameter #1: Growth of the Industry [Score 5/10]

Easy Trip Planners operates in the 'Online Travel market' industry which is currently a INR 2,625 billion industry. This industry faces a major headwind in the form of COVID-19, and it's expected to contract by 2-3% over the next 3 years. 

Over the long term however, there are a few positive shoots to look at. India is expected to be one of the fastest growing destinations for leisure travel. The Government also launched the National Civil Aviation Policy - to make flying affordable to the masses in India.

Parameter #2: Competition & Risks [Score 6/10]

Easy Trip faces competition from players like MakeMyTrip (MMT), Yatra & Cleartrip. In terms of gross booking revenues - MMT has a 50% market share followed by Yatra (9.5%) and Easy Trip Planners (4.6%).

MakeMyTrip bought the Ibibo group in 2017 to strengthen its hotel booking business. It also acquired RedBus as a part of the Ibibo deal. Yatra has acquired several companies like TravelGuru, MagicRooms, BuzzInTown - to increase it's presence in the hotel segment. 

Easy Trip Planners ventured into the hotel segment in 2013, however they have failed to make an impact there. They derive 94% of their revenues from airline ticketing - such concentration is the biggest risk for the Company in our opinion.

There is also an infringement suit ongoing against the Company filed by MMT, alleging that Easy Trip's logos/trademark are used in a way which is similar to MMT. Any adverse news on this front, would significantly impact the brand image.

Parameter #3: Advantages of the Company [Score 7/10]

Easy Trip is the only company in this segment which is making a profit since it's Inception. They boast the lowest operating costs. It's an extremely frugal company - with solid financials. Although it's a small player, they have been able to grow their market share consistently.

100% of the Company is owned by the promoters. No FIIs/DIIs. No VCs. Which means they have been completely bootstrapped and grown the business without any external help. Not something you find easily these days.

Parameter #4 : Financials [Score 8/10]

Financials, is where this Company shines. Gross booking revenues increased by 47% YoY. Revenues have grown by 18% YoY. They have witnessed steady profit growth (except in 2018). There is negligible debt on the books. RoCE is around 40% - which shows you that the promoters are great allocators of capital.

However, the next few quarters will answer the question - 'Can Easy Trip continue to produce such good numbers?'

Parameter #5 : Valuations [Score 5/10]

At the issue price of INR 187, Easy Trip is trading at a P/E of around 60 times - which looks very expensive, for an OTA player. The Company has to double it's profit or exponentially grow their market share to justify this valuation - something we don't see happening realistically. Plus, if the Company lists at a 70-80% premium, the P/E would breach the 'insanity' level.

This issue is a complete Offer for Sale, however we believe that the promoters missed a trick here by not raising fresh capital, which could've been deployed to spearhead growth into different OTA verticals like online hotel bookings, bus & railways.

The IPO frenzy doesn't seem to be slowing down, with 3 IPOs already hitting the markets in the past week. A dozen more IPOs are in the beeline to get listed on the markets in the next two months. 

MTAR Technologies is a precision engineering company which was incorporated in 1999. At the time of recording, the issue was oversubscribed by around 10 times & has attracted a lot of pre-IPO interest from anchor & institutional investors.

Parameter #1 : Growth of the Industry

The precision engineering industry is characterized by high levels of capital expenditure, high level of expertise and intricacy. As at 31 March 2020, its estimated to be a INR 4,098 Billion industry - out of which 50% pertains to the automobile sector.

MTAR operates in the clean energy, nuclear, defense and space sectors which are niches in the precision engineering industry. Nuclear and space are going to witness good growth going forward, owing to Government's plan to set up 10 new fleets of nuclear reactors and also growing private partnerships undertaking by ISRO for satellite launches.

Parameter #2 : Competition

What came as a real surprise to us, was that the Company doesn't really have a pure play competitor. Yes, it does have competition in the form of L&T, Godrej & Boyce and Mahindra Defense - but these companies are large conglomerates. And, for the components that MTAR manufacturers - there's no direct competition.

Parameter #3 : Advantages of the Company

The Company operates in a virtual monopoly, and has long standing partnerships with government companies like ISRO, DRDO, NPCIL. It also caters to Bloom Energy from which it derives 64% of it's revenue.

Any growth in the clean energy, nuclear, defense and space sectors - could indirectly benefit MTAR. For eg. the GoI recently banned import of 101 Defense items which would now require domestic production. If MTAR can capture a significant portion of those Defense orders, it will be a big win for the Company.

One of the most interesting statistics, was the employee turnover ratio. The average employee duration is 15 years - which shows that the Company has been successful in retaining top talent for long period of time, which is really important if you're working in the precision engineering industry.

Parameter #4 : Disadvantages of the Company

For the Fiscal 2020, the Company derived 84% of it's revenues from just 3 customers. Out of which 64% of the revenues came from Bloom Energy. Such heavy customer concentration could pose a risk to the Company going forward, if those 3 customers don't perform well. For eg. If things don't work out for Bloom Energy - which makes hydrogen fuel cells - a concept which is still very new - it would directly impact MTAR.

Another factor is the Order book size. The Company has an order book of around INR 340 crores, which is just 1.6 times FY20 revenue. This indicates that they don't really have long standing orders from customers and in events of any downturn, they don't have a robust order pipeline to support revenue growth.

Parameter #5 : Financials

The Financials look pretty good. Even after being in a capital intensive industry, they have managed to keep the Debt to Equity at just 0.1 times. For FY20, the revenue growth was 17% YoY with a net profit margin of around 14%. The return on capital for FY20 was 19% - very impressive given the industry it operates in.

Parameter #6 : Valuations

From a valuations point of view, the Company looks pretty expensive. At a FY20 EPS of 11, and at the issue price of 575 - the Company is priced at a P/E of 52 times. Now, this is an engineering company that we're talking about. It's not going to double it's revenues every year!

You can reach out to us at thebazaarpodcast@gmail.com

Tesla. Bitcoin. Dogecoin. Cryptocurrency.

These might be the internet's most searched words in the past month. Why wouldn't it be? The price of Bitcoin has shot up by > 1000% since March 2020. Dogecoin, a cryptocurrency which was created out of a meme - has risen by almost 1400% in the past month or so. Greed, has really overtaken the markets - with people wanting to make easy, quick money.

In this episode, we spoke about the following key topics.

#1 Tesla buys Bitcoin

One of the major announcements this week was Tesla coming out and saying that it was going to buy Bitcoin worth $1.5B. That's also how much they spend on R&D in a year. Tesla would also start accepting payments in Bitcoin. Now, as exciting as this sounds - it opens up a series of problems.

(i) Bitcoin is extremely volatile

It wouldn't be surprising if 6 months from now, the price of Bitcoin went down by 50%. This could very well happen, if Governments around the world decide to impose stricter regulations on Cryptocurrencies. In that case, the 'investment' made by Tesla - would be worth a hell of a lot less!

This investment of $1.5B is approximately 8% of Tesla's total cash & cash equivalents - which is no small number. If tomorrow Tesla needs that money, and isn't able to encash those Bitcoins at a profit - it could be a very risky bet. 

(ii) Bitcoin Payments

Accepting payments in Bitcoins will be equally tricky. Because the price of Bitcoin fluctuates so much, on any given day - the price of a Tesla could vary substantially. The Finance team at Tesla might have to account for the fluctuations in Bitcoin on a daily basis and it would be an accounting nightmare just to execute this in the long term. Plus, the disclosure of Bitcoins on a balance sheet itself would pose certain challenges.

#2 Potential Insider Trading? 

On reddit, someone who claims to be an employee at Tesla alleged that the Company had started buying Bitcoin quite some time back when it was trading around $33,000 [a few days back it touched $48,000]. The user has not been verified to work at Tesla (yet) - but wouldn't that be convenient?

Elon recently changed his bio to '#Bitcoin' - which alone caused the price to spike by 4-5% in a matter of minutes. He has been backing this currency & although you can't say that he's directly influencing people to buy Bitcoin - it is quite obvious that his tweets has stirred up excitement in this space.

The question here is, does the SEC have any jurisdiction over this? And even if they do, can they legally do anything about it?

#3 The Rise of the Doge

Dogecoin has been on a tear. It's actually more valuable than quite a lot of listed companies out there. The photo of a smirking dog on a coin - who would've thought anything would come out of that?

But one tweet from Musk, and his crazy horde of fans sent Doge flying. Can it sustain this insane run? I pray it doesn't.

#4 Where are the regulations?

You would hope that the market regulators would have an answer to this.

Turns out, there's not much the SEC can do about the rise in these Cryptos. There's no specific law that governs Cryptocurrencies at the moment and conservatively - it might take sometime before anything substantial happens on the regulations front.

Back in India, the GoI is planning to bring a Cryptocurrency bill which would make it illegal to hold any private Cryptos. The draft bill is not yet out, so if you hold any Bitcoins/Other Cryptos - you still have time to square off your positions. 

Have any topic suggestions? Hit us up at thebazaarpodcast@gmail.com or at https://twitter.com/siddybeee    

In this episode, we talk about key highlights of the Union Budget 2021. It's a topic which has been covered quite a lot in the past week, and we just want to give it an analytical angle for the 'Aam Aadmi'.

The markets were on fire during the Budget week. Sensex was up by more than 4% in a single day and was up by 8% for the week - on the back of a positive budget with no new taxes being introduced. COVID Cess & Capital gains taxes were on the cards, but the Finance Minister announce any such measured pushing the markets into the stratosphere.

Highlight #1: Bad Banks & Development Financial Institution (DFIs)

The GoI proposes to set up a bad bank which would takeover the NPAs from struggling banks, bundle it up and sell it to AIFs/Funds that invest in stressed assets. Now, how exactly a bad bank would work, is again very ambiguous & would the banks be willing to take a steep haircut to make it work - is something we were scratching our heads over.

It was also proposed to set up a DFI - earmarking INR 20,000 crore for the specific purpose of Infrastructure lending. Shankesh deep dived into the history of how DFIs came into existence and analyzed whether it makes any sense to set up a new DFI.

Highlight #2: Fiscal Deficit zooming to 9.5%

One of the major talks after the Budget closed, was the fiscal deficit number. Historically, the GoI has kept it in the range of 3-5% - but a 9.5% is GIGANTIC. We discussed the reasons for the increase in the deficit number and how Food Corporation of India plays a big role in moving the needle.

Highlight #3: Capex

This budget, has been all about the GoI spending money - and a lot of that of Infrastructural development. We need better roads & highways. Better railways. A lot of money was also being set aside for the Healthcare sector - given that we are still not entirely out of the pandemic. 

On this front, we discussed about execution issues and how Infra spending looks good on paper - but could lead to money being blocked in bricks and cements if projects don't get completed on time. We do applaud the GoI regardless - because Infra spending is required to push India towards the 'Developed Nation' tag.

Shankesh also spoke about how Capex is the heart of any Budget and the Multiplier effects of the same.

Highlight #4: FDI and Privatization

The Insurance sector was opened to a 74% FDI from the current 49% - subject to safeguards. The Government is planning to private two banks (the names of which are still unknown to us) and LIC might come out with an IPO in FY22 - which will be (without any competition) - India's biggest IPO in our opinion.

Highlight #5: Direct/Indirect Taxes

Not much activity on this front, however the definition of ULIPs was clarified and it will now be taxed as a Mutual Fund. Depreciation on Goodwill will not be allowed going forward. What stole the show was no new taxes being imposed like COVID cess, Wealth tax on the Ultra rich etc.

All in all, a very progressive budget. The execution, if done right - could really bring a meaningful change in the economy!

You can reach out to us at thebazaarpodcast@gmail.com or hit me up at https://twitter.com/siddybeee

January has seen a flurry of IPOs, starting with IRFC, bouncing to Indigo Paints and Home First Finance and now, StoveKraft. And, there might be a few more in the pipeline. 

StoveKraft's issue size is INR 413 crore out of which INR 95 crore is a fresh issue which will be used to prepay debt on the books. The rest is Offer for Sale - the major beneficiary of which is Sequoia Capital - the investor getting a sweet exit. 

Rishabh & I discussed about the history of the Company and it's brands (Pigeon & Gilma). We spoke about the 2 major segments of the Kitchen appliance industry i.e. Large Kitchen appliances and Small kitchen appliances and the Companies that dominate these segments. 

We also covered StoveKraft's fundamentals (which don't look very good) - looking at a huge pile of debt on the books and the fact that it has negative networth. 

The Company has only started to make profit since 2018 and the margins/return ratios also look very low. We discussed at length certain red flags - like Governance issues & a low capacity utilization. 

Did you apply to this IPO? Let us know at thebazaarpodcast@gmail.com or hit me up at https://twitter.com/siddybeee

In this episode, I invited Rushabh Shah and we spoke about the recent vaccines that got emergency approval in India. We also spoke about how the supply chain would work for the purpose of distributing vaccines, and highlighted key challenges that the GoI will face in the timely administration of the vaccine. 

We also spoke about an application called CoVIN - which could be a game changer in this race of vaccinating 300 million people by August 2021.

You can reach out to us at thebazaarpodcast@gmail.com or hit me up at https://twitter.com/siddybeee

What's the first thing that comes to mind when you hear the word 'Hemp' or 'Bhaang'?. For most it's a glass of Thandai during Holi. What if I told you, that apart from getting you high - Hemp has the potential to disrupt 8-10 different industries? 

I invited Aman (Host of TexWired), and we decoded what the difference is between Hemp & Marijuana. We discussed the different use cases of Hemp and the industries we feel it will disrupt in the foreseeable future. We also touched upon some recent M&A action in the space.

You can listen to Aman's podcast here - https://open.spotify.com/show/4rFdQBwgUxLkS4LB4WFnNV.

You can listen to The Indian Dream's interview of Bombay Hemp Company here - https://open.spotify.com/episode/1tnSL134CgVZK9nHRZeiDL?si=yd_fQF-NS_y-yoYzryB4ig

Mrs. Bector - a regional biscuit and bakery company is coming out with an IPO. We touch upon briefly on the history of the Company, and then we analyzed the Company on several parameters. 

We discussed the Company's competitive advantage, the growth in the Indian biscuit and bakery market. We evaluate how it fares against the Industry big shots (Britannia, Parle & ITC) and take a look at the numbers.  

We scratch our heads to find out the true value of the Company and talk about the potential listing gains and the premium which is floating in the grey market.

Burger King India is coming out with an IPO, and the timing could not have been better. 

Markets are at an all time high, and it wasn’t a surprise that the issue was oversubscribed by 156 times. In this episode, I invited Rishabh Khanna - and we spoke about the objects of the issue. 

We also compared Burger King India over several parameters like - Competitive Advantage, Growth, Competition, Financials & Valuations.

In this episode, I invited Shankesh Jain - who is a banker by profession to analyze the turn of events that took place with Lakshmi Vilas Bank in the past few weeks. 

We spoke about the reason why LVB finds itself in a rut, about the other suitors for the bank before the DBS India merger deal. And, we talk about how important it is for depositors to research about a bank before putting their hard earned money in it.

In this episode, I invited Siddhant and Anmol and we spoke about Jet's rise and how it became the largest private airline in India. We also spoke about Jet's iconic fall and the events that led to it. 

We evaluated the revival plan submitted by Kalrock Capital and Murari Lal Jalan and in our final piece we discussed how Jet Airways - a bankrupt company - was the world's best performing airline stock in 2020.

You can reach out to us at thebazaarpodcast@gmail.com 

In this episode, I invited Utsav to cover updates on the Antitrust hearing. Turns out, the Congress has released a 449 page report which includes their findings and their recommendations. 

We analyzed the Committee's recommendations and how it could effect Big Tech. We also covered the Antitrust lawsuit which the DoJ filed against Google!

You can reach out to us at thebazaarpodcast@gmail.com

Dunkin', the company which sells doughnuts, coffee and ice cream is going to be acquired by Inspire Brands for $8.8B ($11.3B including debt) which is one of the biggest deals in the restaurant space. 

We analyze why Inspire paid such a premium, how Dunkin' operates and how a franchise model works. You can read more about the deal at https://www.fool.com/investing/2020/10/26/dunkin-brands-might-be-going-private-in-88-billion/.

If you want us to cover any specific topic/industry - you can shoot us a mail at thebazaarpodcast@gmail.com 

In this episode, I invited Hardik - who has personally transformed his physical and mental health by changing his eating habits. We discuss Hardik's personal journey, we talk about how the food industry works, how you can take control of your health and lots more!

You can read all about it here : Dr Berg (for fixing health problems) - https://www.youtube.com/c/DrEricBergDC, Thomas DeLauer (for science based facts)- https://www.youtube.com/c/ThomasDeLauerOfficial, Dr Mindy Pelz (all about Intermittent fasting) - https://www.youtube.com/c/DrMindyPelz, KenDBerry (all myths about food) - https://www.youtube.com/c/KenDBerryMD.

You can reach out to us at thebazaarpodcast@gmail.com

In this episode, we talk about our personal shopping experiences, the retail vs online strategy, how technology can change the game & the growth of fashion in India and India's chance to capitalize on the Anti-China sentiments. 

Check out Aman's Podcast 'TexConnect' here - https://open.spotify.com/show/4rFdQBwgUxLkS4LB4WFnNV?si=ZBUZTIOTTViqvNREdc5pCw.

You can reach out to us at thebazaarpodcast@gmail.com 

In this episode, we spoke about the alternative meat industry - plant based meat. We spoke about the players in this industry and it's growth potential. We also discussed about cell based meat and how that works. Given the choice, would you try out plant based meat?

Let us know at thebazaarpodcast@gmail.com

In this episode, we talk about the recent antitrust hearing - in which four of the world's most powerful people were extensively grilled by the Congress. We talk about the allegations levied against Amazon, Apple, Facebook and Google and the responses given by the CEOs. We also explore how Antitrust works in different countries and the potential impact on Google were it to be found in violation of the Act. You can reach out to us at thebazaarpodcast@gmail.com, or on Twitter @TBPSid.

In this episode, we talk about how COVID-19 has forced countries to diversify their supply chains and how that presents a window of opportunity for India. We also talk about increasing FDI inflows, why India is a very attractive investment option for foreign nations to park their money. We cover the recent developments from the Chinese App Ban and how tech startups are filling the void. We wrap the show with our evaluation of certain sectors that could be the winners going forward. You can reach out to us at thebazaarpodcast@gmail.com

With the clock running out on TikTok, we decode Microsoft's deal to acquire TikTok, the political angle, the complexities with this acquisition and how overall this could be one of the best deals for Microsoft over the next few years. You can reach out to us at thebazaarpodcast@gmail.com

In this episode, we talk about Tesla's Q2 earnings, it's future potential, and whether the valuation is justified. We explore a world where Elon Musk becomes a Monk, and how the competition is heating up in the electric car market. Should you buy/hold/short the stock? Tap the play button to find out! You can reach out to us at thebazaarpodcast@gmail.com