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Sectors in Focus

Major Corporate Developments This Week

1. RVNL: Company emerged lowest bidder for a South Western Railway project worth Rs 156.35 crore.
2. Lupin: US FDA issues Establishment Inspection Report (EIR) for company’s manufacturing facility in Somerset, New Jersey
3. JTL Industries: Company Enters MOU with RCI for 200 Mt/Month Copper And Brass Alloys.
4. MOIL: Co says prices of all ferro grades of manganese ore with manganese content of Mn-44% and above have been increased by 10%.
5. AstraZeneca Pharma India: Co has received permission from the Central Drugs Standard Control Organisation, Directorate General of Health Services, Govt of India to import for sale and distribution of Durvalumab solution for infusion 120 mg/2.4 ml and 500 mg/10 ml (Imfinzi) for an additional indication.
6. Solar Industries India: Co unit received defence export orders worth ₹2,160 crore.
7. Zen Technologies: Co secures patent for automated hard kill firearm mounting system.
8. Biocon Limited: Co launches its glucagon-like peptide-1 (GLP-1), Liraglutide, in the United Kingdom.
9. Transrail Lighting: Co wins new orders of ₹2,752 crore, strengthening its position in the transmission & distribution sector.
10. Tata Power: TP Solar Limited, Tata Power’s solar manufacturing arm, wins ₹632 crore contract from SECI to supply 292.5 MWP DCR solar modules.
11. Orient Tech: Co announces its collaboration with Amazon Web Services (AWS) India to offer advanced GPU and AI services.
12. Glenmark Pharma: Glenmark Pharmaceuticals Inc., USA launches epinephrine injection USP, 10 mg/10 ml, multiple-dose vial. This injection has achieved annual sales of approximately USD 42.7 million.
13. Jupiter Wagons: Jupiter Tatravagonka Railwheel Factory secures ₹255 crore order from Braithwaite & Co. Co says new Odisha facility to boost annual production to 1,00,000 wheel sets, reducing reliance on imports.
14. Mastek: Co secures multi-year, multi-million dollar contracts from the UK public service department. Co secures contracts worth $85 million over 2 years.
15. Caplin Point Laboratories: Co unit Caplin Steriles gets USFDA approval for Brimonidine Tartrate and Timolol Maleate Ophthalmic (eye drops). Co unit gets USFDA nod for glaucoma drugs. According to IQVIA™ (IMS Health), Brimonidine Tartrate and Timolol Maleate Ophthalmic Solution had US sales of approximately $242 million for the 12-month period ending December 2024.
16. KPI Green Energy: KP Group signs MoU with Madhya Pradesh Govt for 1.8 GW renewable projects.
17. Marksans Pharma: Co subsidiary in UK, Relonchem Limited, receives marketing authorization for the product Ibuprofen and Paracetamol 200 mg/500 mg film-coated tablets.
18. Jyoti Structures: Co gets ₹3.89 billion order from Adani Energy.
19. Gensol Engineering: Co unlocks value with ₹350 crore strategic deal for Scorpius Trackers' US subsidiary.
20. Healthcare Global Enterprises: KKR acquires controlling stake in Co for USD 400 million. KKR is expected to hold an equity stake of between 54-77%. KKR to be the largest and controlling shareholder.

TechnoFunda Investing Quote from Legends -

Jean-Marie Eveillard's quote emphasizes the critical role of risk management in investing. While making high returns is appealing, long-term success is ultimately determined by how well an investor protects their capital. Significant losses can be difficult to recover from due to the mathematics of compounding—losing 50% of a portfolio requires a 100% gain just to break even. By focusing on preserving capital, avoiding reckless speculation, and managing downside risk, investors can ensure they stay in the game long enough to capitalize on opportunities while minimizing irreversible damage. This principle aligns with the wisdom of legendary investors who prioritize avoiding large drawdowns over chasing short-term gains.

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TechnoFunda 101 - Power Capsules

Learn technical as well as fundamental concept in a simple way

Return on Invested Capital (ROIC) – The Ultimate Efficiency Metric

ROIC is one of the most powerful indicators of a company’s ability to generate sustainable returns on the capital it invests. Unlike other profitability ratios, ROIC factors in both equity and debt, making it a comprehensive measure of capital efficiency.

🔍 What is ROIC?

Return on Invested Capital (ROIC) measures how effectively a company reinvests its capital to generate profits.

📌 Formula:

ROIC = [Net Operating Profit After Tax (NOPAT)\Invested Capital]×100

Where:

• NOPAT (Net Operating Profit After Tax) = Operating Profit × (1 - Tax Rate)
• Invested Capital = Total Debt + Shareholders’ Equity - Cash & Equivalents

Why exclude cash? Because cash sitting idle isn’t truly invested in operations.
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💡 Why is ROIC Important?

🔹 Capital Allocation: Helps investors see if a company is efficiently using capital to create shareholder value.

🔹 Comparing Businesses: Higher ROIC means better returns on investment compared to peers.

🔹 Long-Term Performance Indicator: Companies with consistently high ROIC tend to compound wealth faster over time.

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🛠 ROIC vs. Cost of Capital (WACC)

• If ROIC > Weighted Average Cost of Capital (WACC) → The company is creating value.
• If ROIC < WACC → The company is destroying value.

💡 Example:

If a company earns 15% ROIC but its cost of capital (WACC) is 10%, it is creating 5% excess returns—a sign of efficient capital deployment.
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📈 How to Use ROIC in Stock Analysis?

1️⃣ Identify Competitive Advantages

A consistently high ROIC signals a strong moat, such as:

✅ Brand Power (e.g., Apple, Nestlé)

✅ Pricing Power (e.g., Asian Paints, Pidilite)

✅ Network Effects (e.g., Google, Visa)

2️⃣ Compare Across Sectors

• Asset-Light Businesses (e.g., IT, FMCG): High ROIC (20%+), as they need minimal capital to grow.
• Capital-Intensive Businesses (e.g., Manufacturing, Infrastructure): Lower ROIC but should still exceed WACC.

3️⃣ Spot Cyclical Traps

Companies in cyclical industries (e.g., metals, oil) may show temporary spikes in ROIC due to commodity cycles. Sustainable ROIC matters more than short-term fluctuations.

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🚀 Key Takeaways

✅ ROIC measures true capital efficiency, considering both debt & equity.

✅ Always compare ROIC with WACC to check value creation.

✅ High ROIC is a hallmark of companies with strong moats.

✅ Use sector benchmarks to interpret ROIC correctly.

Would you like a visual breakdown of ROIC components? 📊🚀

🚀 My Content For This Week 🎬 YouTube: PE Ratio in Indian Stock Market | PE Ratio Explained​ ​ 📋 Twitter: Vivek Mashrani, CFA @MashraniVivek 🎬🎬 What to do in such boring market conditions? Investing can feel complex, but great lessons are often hidden in plain sight—like in movies! Here are 10 must-watch films that will transform how you see money, business, and the stock market. 🎬💡 A thread 5:32 PM • Feb 22, 2025 0 Retweets 3 Likes Read 2 replies ​ 📷 Instagram: Bengaluru Meet Feb 2025​ 🔗 Linkedin: Bengaluru Meet Feb 2025​ ​

🎙️ My Weekly Podcast For You

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Keep Compounding...

Vivek Mashrani, CFA Founder, TechnoFunda Investing

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