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Sectors in Focus

Major Corporate Developments This Week

1. Railtel: Co wins order worth 1625 cr rupees
2. Cineline India: Monetization of hotel asset for INR 270 crores || Co becomes a net debt-free company; to fully repay the company's debt || Co says complete focus on expanding film exhibition business
3. Zaggle Prepaid: Co has entered into an agreement with Wonder Home Finance || Zaggle would provide Wonder Home Finance, Zaggle Zoyer & Zaggle Save propositions
4. Mankind Pharma: Co says NCLT approves amalgamation of BSV Pharma with Bharat Serums and Vaccines
5. Power Mech Projects: Co secures 4.25B rupees order from Adani Power subsidiary
6. HAL: Centre approves record defence deal for 156 indigenous LCH Prachand helicopters || This deal represents the largest order to date for the company
7. Ircon: Co wins order worth rupees 6.1B
8. Dixon: Indian cabinet approval for electronic PLI approval worth 25000 cr
9. RIR Power Electronics: Co. to establish India's first silicon carbide semiconductor facility in Odisha with ₹618 crore investment
10. PTC Industries: Co secures major order from Safran Aircraft Engines
11. HBL: Co wins order worth rupees 500 cr
12. Bharat Heavy Electricals: Co wins large order worth rupees 11800 cr
13. Ashok Leyland: Defence business secures multiple orders worth ₹700 crore
14. Sterlite Tech: Co in consortium with Dilip Buildcon, received work order worth rupees 2,631.14 cr from BSNL
15. BEML: Co got contract from Bengaluru Metro Rail Corporation for Bengaluru Metro Rail projects || Contract value approximately 4.05B rupees
16. Zen Technologies: Co secures INR 152 crore order from Ministry of Defence for integrated air defence combat simulator
17. HCLTech: Co joins Samsung Advanced Foundry ecosystem as a design solution partner || Co to offer comprehensive application-specific integrated circuit design services
18. Bharat Forge: India govt - Defence Ministry signs contracts with Bharat Forge, Tata Advanced System to buy artillery guns and gun towing vehicles for 69B rupees
19. HAL: GE Aerospace begins deliveries of F404-IN20 engines to the company for the Tejas MK1A fighters. First of 99 engines delivered yesterday
20. SML Isuzu: Ashok Leyland may take majority stake in the company

TechnoFunda Investing Quote from Legends -

John Keynes' quote, "Markets can remain irrational longer than you can remain solvent," highlights the unpredictability of financial markets. It suggests that even if you are correct in your analysis, the market may continue moving irrationally against your position for an extended period. As a result, traders or investors betting on a rational correction may face significant losses or run out of capital before the market eventually aligns with fundamentals. It’s a cautionary reminder about the dangers of timing the market and the importance of risk management.

📚 Book I'm Reading This Week Fortune's Formula Fortune's Formula by William Poundstone explores the fascinating intersection of gambling, mathematics, and investing. The book chronicles how mathematician Claude Shannon and gambler Edward Thorp applied the Kelly Criterion, a formula for optimal bet sizing, to beat both casinos and financial markets. Through real-life stories and financial insights, it reveals how this formula became a secret weapon for some of the most successful investors, while also highlighting the risks of misapplying it. List of All Books I have Shared →

TechnoFunda 101 - Power Capsules

Learn technical as well as fundamental concept in a simple way

Cash Conversion Cycle – The Secret Metric Behind Efficient Businesses

Everyone looks at revenue and profit, but the smartest investors also ask:
👉 “How fast does this company turn its operations into cash?”

That’s where the Cash Conversion Cycle (CCC) comes in. It shows how quickly a company can turn its inventory and receivables into cash flow. And companies with a short CCC are often cash-generating machines.

🧠 What is the Cash Conversion Cycle (CCC)?

Formula: CCC = Days Inventory Outstanding + Days Sales Outstanding − Days Payables Outstanding

In simple terms:
➡ How long does it take to buy inventory, sell products, and collect cash—minus the time taken to pay suppliers?

• Shorter CCC = Better liquidity & efficiency
• Longer CCC = More capital stuck in operations

🏭 Breakdown of Components:

1️⃣ Days Inventory Outstanding (DIO)

How many days inventory sits before being sold.

🔺 High DIO → Slow-moving inventory
🔻 Low DIO → Efficient inventory management

2️⃣ Days Sales Outstanding (DSO)

How long it takes to collect payment from customers.

🔺 High DSO → Weak credit control
🔻 Low DSO → Fast cash recovery

3️⃣ Days Payables Outstanding (DPO)

How long the company takes to pay its suppliers.

🔺 Higher DPO = Delaying cash outflow (good, up to a point)
🔻 Lower DPO = Paying too fast, which hurts cash position

🏆 Why CCC Matters to Investors:

✅ Helps you identify capital-efficient businesses​
✅ Short CCC = Faster reinvestment cycle = Better compounding​
✅ CCC trends show operational health even before P&L changes

🔍 Real-Life Examples:

• FMCG Companies (e.g., HUL, Nestlé):​
  Often have negative CCC – they get paid before they pay suppliers!
  → Strong working capital model and high RoCE
• Auto Sector:​
  Typically has longer CCC due to manufacturing and dealer credit cycles
  → Watch CCC trend during demand slowdowns
• Retail (e.g., DMart):​
  Low inventory days + fast sales + good supplier terms = extremely efficient cash engine

📌 How to Use CCC Practically:

• Compare CCC across peers in the same industry
• Watch for improving or deteriorating trends YoY or QoQ
• Use CCC along with ROCE and Free Cash Flow to spot operationally strong companies

💡 Key Takeaways:

• CCC helps uncover operational efficiency behind the numbers
• Companies with low or negative CCC often enjoy strong cash flows and better margins
• Always compare CCC in context of industry norms

​

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🚀 My Content For This Week 🎬 YouTube: Top Technofunda Sectors to Invest in 2025 | Technofunda Themes​ ​ ​ 📋 Twitter: Vivek Mashrani, CFA @MashraniVivek 💡🎯 A stock up 10x sounds great, but what if it came at the cost of poor capital efficiency? Without strong ROIC, high growth can be an illusion...wondering why? Return on Invested Capital (ROIC) is the Ultimate Efficiency Metric along with ROCE Let’s understand this...🧵 4:3 PM • Mar 29, 2025 2 Retweets 10 Likes Read 1 replies ​ 📷 Instagram: What happens if that paycheck stops? 😨​ 🔗 Linkedin: What happens if that paycheck stops? 😨​ ​

🎙️ My Weekly Podcast For You

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Keep Compounding...

Vivek Mashrani, CFA Founder, TechnoFunda Investing

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