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Sectors in Focus

Major Corporate Developments This Week

1. Aditya Birla Real Estate: Company’s arm Birla Estates launches residential project ‘Birla Punya’ in Pune; total revenue potential at ₹2,700 crore.
2. NBCC: Company bags order worth ₹44.62 cr from Mahatma Gandhi Institute for Rural Industrialization, Wardha
3. Shilpa Medicare: Company’s arm Shilpa Biologicals enters into binding term sheet with Switzerland-based mAbTree Biologics AG for development, manufacture, marketing & sale of a New Biological Entity.
4. Star Cement: Company’s subsidiary, Star Cement Meghalaya Ltd, was chosen as the preferred bidder for a limestone block in Assam.
5. Suraj Industries: Company has signed a manufacturing agreement with Carya Chemicals & Fertilizers Private Limited for producing country liquor and Rajasthan liquor.
6. V.L. Infraprojects Ltd: Company has secured Rs 26.37 crore order from Gujarat Urban Development Company Ltd.
7. Coffee Day Enterprises: Company Settles Outstanding Debt for Rs 2.05 Billion
8. Cellecor Gadgets: Company Expands Presence in South India through Partnership with B New Mobiles and celekt Retail Chains, Projecting Rs 500 Million in Annual Business.
9. Ircon: Gets order worth of Rs 1096 crore by construction of a new secretariat complex, including campus infrastructure, in Meghalaya's New Shillong City.
10. Ratnaveer: IVR reaffirmed as IVR BBB+ with outlook revised from stable to positive for long term and short term facilities.
11. Morepan: Company launched Empamore, a cost-effective treatment for Type 2 Diabetes, Heart Failure, and Chronic Kidney Disease
12. Alembic Pharma: Arm Alembic Global Holding SA Incorporates Wholly-owned Subsidiary ‘Alembic Lifesciences Inc’ In US.
13. JSW Energy: CCI approves acquisition of 100% shareholding of O2 Power Midco Holdings & O2 Energy SG by JSW Neo Energy.
14. Swiggy: Company said its quick commerce platform Swiggy Instamart has expanded its quick commerce services to 100 cities across India
15. ONGC-NTPC Green: Companies will together invest Rs 27,000 crore, including the under-construction projects of Ayana Renewable Power.
16. IREDA: Board approved increasing its borrowing program for FY24-25 by Rs. 5,000 Cr.
17. Concord Drugs: Board has temporarily postponed its plan to raise funds through a preferential share issue and increase authorized capital
18. HUL: CCI approves Hindustan Unilever’s Acquisition of Minimalist Brand-owner Uprising Science.

TechnoFunda Investing Quote from Legends -

Sir John Templeton's quote, "The four most dangerous words in investing are: This time it’s different," highlights the risk of believing that market cycles or fundamental principles have permanently changed. Investors often justify irrational exuberance or ignore historical patterns by assuming that current conditions are unique. However, while short-term factors may vary, market fundamentals—such as valuations, earnings growth, and economic cycles—tend to revert to the mean over time. Falling for the "this time is different" mindset can lead to costly mistakes, as it often precedes speculative bubbles or major corrections.

📚 Book I'm Reading This Week Quality of Earnings Quality of Earnings by Thornton L. O'glove is a practical guide that teaches investors how to analyze financial statements beyond surface-level figures. The book emphasizes the importance of scrutinizing earnings quality rather than blindly trusting reported profits. O'glove highlights how companies can manipulate financial data through accounting gimmicks, making their performance appear stronger than it is. Through real-world examples, he demonstrates how to detect red flags, assess the reliability of earnings, and make smarter investment decisions based on true financial health. List of All Books I have Shared →

TechnoFunda 101 - Power Capsules

Learn technical as well as fundamental concept in a simple way

Tobin’s Q – A Valuation Indicator for Long-Term Investors

When it comes to valuing a company or even the broader market, investors often use ratios like P/E or P/B. But there’s another powerful, less commonly used tool that offers a unique macro perspective: Tobin’s Q.

Created by Nobel Prize-winning economist James Tobin, this ratio helps determine whether an asset (or market) is overvalued or undervalued by comparing market value with replacement cost. Let’s break it down 👇

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🔍 What is Tobin’s Q?

Formula:

Tobin’s Q= Market Value of Assets / Replacement Cost of Assets

• Market Value = What investors are currently paying for the company (market cap + debt).
• Replacement Cost = How much it would cost to rebuild or replace the company’s assets from scratch today.

💡 Interpreting Tobin’s Q

🔹 Q > 1:

• The market is valuing the company (or market) more than its replacement cost.
• Often a sign of overvaluation. New competition may be attracted, leading to lower future returns.

🔹 Q < 1:

• The market is valuing the business below the cost of rebuilding it.
• Could indicate undervaluation or an opportunity to invest in distressed but asset-rich businesses.

🔹 Q ≈ 1:

• The company is fairly valued in terms of its asset base.

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🏗️ Why Does Tobin’s Q Matter?

1️⃣ Macro-Level Market Valuation

Tobin’s Q can be applied to the entire stock market to identify whether the market as a whole is overheated or undervalued.

✅ Used by economists and long-term investors to forecast returns.

2️⃣ Useful in Asset-Heavy Industries

Especially relevant for businesses where fixed assets dominate (like infrastructure, steel, manufacturing).

3️⃣ Helps Spot Cycles

• During market bubbles, Tobin’s Q tends to be significantly above 1.
• During deep bear markets, it often drops below 1, signaling long-term opportunity.

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📊 Tobin’s Q in Real Life

• In the dot-com bubble, Tobin’s Q soared well above 1, signaling market exuberance.
• In 2008 and early 2020, the ratio fell below 1, highlighting opportunities for value investors.

🔎 While not perfect for timing entries, Tobin’s Q is useful for macro positioning and avoiding euphoric peaks.

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⚠️ Limitations

• Hard to accurately estimate replacement costs, especially for intangible-heavy firms (tech, brands).
• Not as effective for companies with few physical assets.

📌 Best used alongside other metrics like ROIC, P/BV, and earnings growth for a more holistic view.

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✅ Key Takeaways

• Tobin’s Q offers a long-term valuation perspective based on economic logic.
• Q > 1 = Possible overvaluation; Q < 1 = Potential undervaluation.
• Use it to understand where the market stands in its cycle, especially in asset-heavy sectors.

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🚀 My Content For This Week 🎬 YouTube: Technical Analysis for Beginner Investors | Price Action for Stock Market​ ​ ​ 📋 Twitter: Vivek Mashrani, CFA @MashraniVivek 💥💥 Markets have bounced back strongly, and many are wondering what to do next. Here’s how I’m screening stocks and positioning myself right now… A thread… 👇 5:48 PM • Mar 22, 2025 0 Retweets 5 Likes Read 2 replies ​ 📷 Instagram: TechnoFunda investing isn’t just about picking stocks—it’s about mastering the cycle of mistakes, learning, and growth!​ 🔗 Linkedin: TechnoFunda investing isn’t just about picking stocks—it’s about mastering the cycle of mistakes, learning, and growth!​​ ​

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Keep Compounding...

Vivek Mashrani, CFA Founder, TechnoFunda Investing

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