MultiBaggers
CAPEX
- Capital expenditure.
Research
Top Down
- Start from TAM and industry growth.
- Analyze the company through the lens of a fast-growing industry.
Bottom Up
- Start from the company first.
- Then analyze the industry around it.
Opportunities for Growth
Ways a company can expand TAM or compound growth:
- new product launch
- geographical expansion
- growth in the end-user industry
- client mining, meaning more business from one client
- market share increase
- industry growth
- new branch introduction
- distribution expansion
- acquisition
- capex
Industries
Simple Category
- FMCG -> penetration
- retail, for example
Manyavar - building materials, for example steel, wires, cables
- consumer durables
- hospital industry
- exchanges, for example
IEX,MCX - auto, for example
M&M - QSR, restaurants
Medium Complexity
- agrochemicals
- specialty chemicals, for example
Navin - capital goods
- cement
- banking industry
- auto ancillary, for example
Pricol
Complex
- pharma -> needs domain experts
- bulk chemicals
- metals
- EPC and infra
- life and general insurance
- telecom
- real estate
TAM
- SEBI filings
- QIP documents
- DRHP
- investor presentations
- Trendlyne reports
Segmentation
Variables to track in every industry.
Hospitals
- Greenfield capex
- expansion into a new city on new land
- can take around 6 years to break even
- Greenfield within the same city
- break-even can be around 15 months to 2 years
- Brownfield capex
- expansion in the same hospital or on the same land parcel
- break-even can be around 3 to 9 months
- mergers and acquisitions
- regulation
- maturity of the hospital
FMCG
- volume growth
- category presence
Auto Ancillary
- diversification across vehicle categories
- whether it is a 2-wheeler proxy or PV proxy
- geographies served
- joint ventures
Chemicals
- margins by product
- what type of capex is being done
Exchanges
- volume growth
- cyclicality
Brokers
- early-cycle plays
- cyclical behavior
Polyfilms
- supply side
Defense
- order book
- bid pipeline
Cement
- EV per tonne
- per kg realization
Retail
- category winner
- volume growth
New Age
- break-even
- contribution margin
- path to PAT
QSR
- same-store sales growth
- format risk
Profit Pools
- Does everyone make money here?
- Do only a few players make money here?
- Does everyone lose money here or make very little?
Market Structure
- Too many players -> perfect competition
- Handful of players -> oligopolistic
- Only one player -> monopolistic
Resources to Study
- DRHP
- annual reports
- concalls, often through Screener
- research reports through Trendlyne
- management interviews
- ValuePickr threads
- SOIC - Tijori Finance