Welcome to the Technofunda Investing community. Thank you for being Life Long Learner...!!!
Share this newsletter Via: LinkedIn, WhatsApp, Twitterโ
You can view all previous newsletters hereโ
๐ Market Kya Lagta Hai
Nifty 50 ๐ป-0.60%
Midcap 150 ๐ผ+1.23%
Smallcap 250 ๐ผ+0.68%
|
Sectors in Focus
Major Corporate Developments This Week
- Adani Enterprises: Investing $11.5 billion in a new aluminium smelter in Odisha, potentially increasing India's aluminium production capacity by nearly 50%. LME also approved Adani Copper's Gujarat facility for contract deliveries.
- Adani Green Energy: Became the first Indian company to cross 20 GW of operational renewable energy capacity.
- Aster DM Healthcare: Completed merger with Quality Care India, creating one of India's largest hospital networks with 10,600+ beds across 39 hospitals.
- Astral: Announced the demerger of its chemicals business, creating a pure-play plumbing and building materials company.
- Bharat Dynamics (BDL): Expected to manufacture 100 launchers and 2,300 missiles under the indigenous MPATGM programme.
- Bharat Electronics (BEL): Likely to receive a โน30,000 crore QRSAM order and manufacture 600 HAMMER missiles under Make in India.
- Bharti Airtel: Airtel Money commenced operations as an RBI-licensed NBFC, with plans to deploy โน20,000 crore over the coming years.
- Blue Star: Targeting โน4,000 crore revenue from the data centre cooling business by FY29.
- DCM Shriram: Received a repeat Maersk order for 1,000 India-made shipping containers and its Jhagadia plant joined the World Economic Forum's Global Lighthouse Network.
- Dixon Technologies: Operationalising JVs with Inventec (laptops/servers) and Gemtek (telecom equipment) while nearing approval for its Vivo JV.
- FirstCry: Approved a โน300 crore stake sale in Swara Baby ahead of its proposed IPO.
- HCLTech: Won a $1.14 billion AI-led deal from a European Fortune Global 50 client.
- Himadri Speciality Chemicals: Planning a 100 GWh battery materials facility, expected to generate โน30,000 crore in additional revenue over five years.
- Hindustan Zinc: Plans to diversify into rare earths, potash and tungsten while targeting a doubling of annual metal production to 2 million tonnes.
- Honasa Consumer: Acquired 58% stake in Fluence Pharma, entering the nutraceuticals market.
- Infosys: Acquired In-Tech (โฌ480 million) and secured a $1.6 billion NHS IT modernisation contract.
- Kalpataru Projects (KPIL): Won fresh orders worth โน2,957 crore across T&D, buildings and water projects.
- KEC International: Secured new orders worth โน1,754 crore, including its largest-ever US tower supply order.
- Larsen & Toubro (L&T): Partnered with Holtec for global deployment of SMR-300 small modular reactors and leased land to Amazon Data Services for data centres.
- Mazagon Dock Shipbuilders: Selected to anchor a โน20,000+ crore greenfield shipbuilding cluster in Maharashtra.
- Paytm: Received a licence to operate in Europe, expanding its international payments opportunity.
- Persistent Systems: Announced the โฌ1.27 billion acquisition of Nagarro and secured a $650 million client deal.
- PFC: Merger with REC approved, creating India's largest power financing institution with a loan book exceeding โน11 lakh crore.
- Reliance Industries: Leading preparations for the Jio Platforms IPO, while Campa became India's fourth-largest carbonated beverage brand.
- Saregama: Acquired 90%+ stake in Pocket Aces for โน308 crore, strengthening its digital content portfolio.
- Sterlite Technologies: Raised โน1,500 crore via QIP and secured a โน10,000 crore order from a US hyperscaler.
- Suzlon Energy: Won the first commercial order for its new 5 MW S175 wind turbine.
- Tata Communications: Investing $152 million to significantly expand India-Singapore subsea cable capacity.
- Tata Motors: Partnered with Welspun Renewable Energy, launched the Sierra EV, completed the Iveco acquisition, and received its first international investment-grade credit rating.
- Tata Steel: Plans โน20,000 crore FY27 capex while progressing toward 40 MTPA India steel capacity.
- TCS: Acquired Coastal Cloud ($700 million) and won a $1+ billion, 10-year contract from Telefรณnica UK.
- Titagarh Rail Systems: Aiming to double passenger coach production by Q2 FY27 with long-term margin expansion.
- Transformers & Rectifiers India (TARIL): Won an ultra-mega PGCIL order exceeding โน1,000 crore.
- TVS Motor Company: Became India's largest two-wheeler manufacturer by monthly sales for the first time.
- V2 Retail: Reported 58%+ revenue growth and plans to open 200+ stores this year.
- Voltas: To begin AC exports to Europe and the Middle East while crossing 1 million AC sales in Q1 FY27.
- Wipro: Acquired Harman Digital Transformation Solutions ($375 million) to strengthen AI-led engineering capabilities.
- Zee Entertainment: Promoters proposed a โน3,143 crore capital infusion through warrants, potentially raising their stake above 20%.
- Zydus Lifesciences: Partnered with Apollo Hospitals and Guardant Health to launch Shield, a multi-cancer early detection test in India.
- Quality Power Electrical Equipments: Subsidiaries secured โน56.6 crore in domestic and export power equipment orders, strengthening export credentials.
- DCX Systems: Received fresh orders worth โน47.6 crore for cable harnesses and PCB assemblies.
- Diffusion Engineers: Won a โน26.3 crore domestic order for RAPH Rotor Assemblies.
TechnoFunda Investing Quote from Legends -
Exceptional investors don't analyse every company from scratch. Instead, they build a mental library of recurring business patterns. With experience, they begin to recognise familiar signals across different industries, management teams, and market cycles. They compare what they are seeing today with situations they have encountered before, allowing them to understand not only what is happening, but why it matters and what it could eventually become.
๐ Book I'm Reading This Week
The Great Mental Models Volume 1: General Thinking Concepts by Shane Parrish and the Farnam Street team is a practical guide to improving decision-making and critical thinking by mastering foundational mental models. The book introduces timeless concepts drawn from disciplines like physics, biology, and philosophy, such as first principles thinking, inversion, and second-order consequences. By internalizing these models, readers can develop a clearer, more structured way of approaching complex problems, making better choices in both personal and professional life. It's the first installment in a series designed to help readers build a latticework of mental models for clearer thinking and smarter living.
|
TechnoFunda 101 - Power Capsules
Learn technical as well as fundamental concept in a simple way
Selling Better, Not Selling More
One of the most overlooked drivers of sustained earnings compounding
Most investors become excited when a company announces ambitious revenue targets or aggressive capacity expansion. Revenue growth is easy to understand, easy to measure, and often dominates market conversations.
However, history suggests that some of the greatest wealth creators did not become extraordinary by simply selling more. They became extraordinary by selling better.
This is one of the most powerful pattern recognition frameworks in investingโthe Product Mix Change.
Imagine two manufacturing businesses, each growing revenue by 15% annually.
The first company continues selling the same products to the same customers, competing largely on price. Revenue grows, but margins remain flat. Every additional rupee of sales requires more working capital, more competition, and greater execution. Earnings grow, but only modestly.
The second company takes a different path. Instead of expanding volume, it gradually shifts towards higher value-added products. It invests in engineering capabilities, develops proprietary solutions, earns customer approvals, and moves up the value chain. Revenue may still grow at 15%, but gross margins improve, operating leverage kicks in, return on capital rises, and earnings begin growing at 25โ30%.
From the outside, both companies appear similar.
Underneath, they are becoming fundamentally different businesses.
That is the power of product mix.
The Evolution of a Compounder
Many successful businesses follow a remarkably similar journey:
Commodity Product
โ
Customized Product
โ
Mission-Critical Solution
โ
Higher Gross Margins
โ
Better Cash Flows
โ
Higher ROCE
โ
Sustained Earnings Growth
โ
Valuation Re-rating
This transition rarely happens overnight. It often takes years of investment in R&D, customer relationships, certifications, and manufacturing capabilities before the financial impact becomes visible.
Why This Matters to Investors
Markets often reward visible growth.
The best opportunities, however, emerge when the economics of the business improve before the earnings become obvious.
A company shifting towards higher-value products often experiences:
- Improving gross margins.
- Better pricing power.
- Lower customer churn.
- Stronger return on capital.
- Higher free cash flow.
- Greater resilience during industry downturns.
Eventually, these improvements translate into faster earnings growth and, in many cases, higher valuation multiples.
How to Identify Product Mix Changes Early
Rather than focusing only on quarterly revenue growth, investors should ask deeper questions:
- Is management discussing new products or new applications?
- Is the company moving from components to systems or complete solutions?
- Are gross margins improving consistently over multiple quarters?
- Is a larger share of revenue coming from higher-value offerings?
- Is the company entering adjacent businesses that leverage existing capabilities?
- Are customers becoming more dependent on the company's products?
The answers to these questions often reveal changes that are not yet fully reflected in reported earnings.
One of the most valuable lessons in investing is that earnings are usually the result of business evolutionโnot the starting point.
By the time earnings growth becomes obvious, much of the opportunity has already been recognised by the market.
The real edge lies in identifying businesses whose economic engine is quietly improving.
Companies rarely become multibaggers because they sell more.
More often, they become multibaggers because they sell better.
And learning to recognise that transition before the rest of the market is one of the most powerful pattern recognition skills an investor can develop.
๐๏ธ My Weekly Podcast For You
Keep Compounding...
|
|
Vivek Mashrani, CFA
Founder, TechnoFunda Investing
|
|
|
You Can Share This Newsletter...!!!
|
|
|
Follow all my content on my social media handles below
|
Disclaimer:
- The content provided on this page by the publisher is not guaranteed to be accurate or comprehensive. All opinions and statements expressed herein are solely those of the author.
- The information found on this newsletter should not be interpreted as investment advice, nor does it express any viewpoint on the future trading prices of any company's securities. The opinions and information shared here should not be taken as specific guidance for making investment decisions.
- The content, including opinions and expressions, present on this newsletter, is not a direct or indirect offer or solicitation to buy or sell securities or financial instruments mentioned. The securities quoted are for illustration only and are not recommendatory.
- Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
- By accessing the site or affiliated social media accounts, you signify your agreement to this disclaimer and the terms of use.
- Neither the publisher nor its affiliates assume liability for any direct or consequential losses arising directly or indirectly from the use of the information provided in this content.
โ