Welcome to the Technofunda Investing community. Thank you for being Life Long Learner...!!!

Share this newsletter Via: LinkedIn, WhatsApp, Twitter​

You can view all previous newsletters here​

Sectors in Focus

Major Corporate Developments This Week

1. HG Infra Engineering - the company was picked as the lowest bidder by the Central Railway for a Rs. 716.11-crore project.Bajaj Auto: Company announced Buyback upto 40 lakh equity shares (1.41% of Capital) at Rs 10000/Sh through tender offer.
2. GHCL - it has signed two memorandums of understanding (MoU) at the Vibrant Gujarat Summit for investing Rs. 3,450 crores in Gujarat.
3. Paytm to invest Rs. 100 cr in GIFT City, also plans to offer AI-driven cross border remittance.
4. Steel Strips completed the process of acquisition of AMW Auto component Ltd (AACL).
5. NBCC gets work order worth Rs. 218 crores from the National Institute of Fashion Technology.
6. Infibeam - company has inked a pact with the Gujarat government to invest Rs 2,000 crore in the state by 2030.
7. Shakti Pumps (India) - the company announced it had received its 10th patent for a surface helical pump construction with collinear flow.
8. Global pharma major Lupin announced the launch of Varenicline Tablets, 0.5 mg and 1 mg, after having received an approval from the United States Food and Drug Administration (USFDA).
9. Dynacons Systems & Solutions announced a significant order from Bharat Heavy Electricals Ltd (BHEL) for High Performance Digital Workplace Solution as a Service including Desktops, Workstations, LED Projectors and UPS for their nationwide offices / factories all over India. The overall Project Value is Rs. 137 Crores for Five years as contract period.
10. Sundram Fasteners: Company signs MoU with Tamil Nadu Govt for investment of ₹1,411 cr
11. LIC: Company gets demand orders worth Rs 3,528.75 crore form Income Tax Authorities, Mumbai.
12. Strides Pharma: Company's step-down subsidiary agrees to sell 100% stake in Eris Pharma for €200,000.
13. Tata Metaliks: The National Company Law Tribunal, Mumbai sanctioned the merger of Tata Metaliks with Tata Steel.
14. Bajel Projects: Company has received a LOI worth Rs 487.64 crore for supply of plant and installation services GIS substations project in Uttar Pradesh.
15. Shyam Metalics and Energy: The company raised Rs 1,385 crore through the Qualified Institutional Placement (QIP) against the total bid amount received Rs 4,055 crore, representing 3.5 times the fund received.
16. Bajaj Auto: Company announced Buyback upto 40 lakh equity shares (1.41% of Capital) at Rs 10000/Sh through tender offer.

TechnoFunda Investing Quote from Legends -

A man of few yet precise words, Graham here stresses the importance of basing your investment decisions on hard facts and analysis, rather than just speculating about and forecasting future stock movements. If there is one thing you should know, it is that the market is not predictable. Therefore, do not focus on speculation. Rather, take steps to understand the underlying facts and go with wise decisions.

📚 Book I'm Reading This Week ​​​​One Up On Wall Street​ Peter Lynch's "One Up on Wall Street" is an essential read for individual investors, providing a roadmap for using everyday knowledge to navigate the stock market. Through ten chapters, Lynch, a legendary mutual-fund manager, unravels the intricacies of investing, debunking the myth that one has to be a Wall Street professional to succeed. He begins by recounting his own transformative journey from a curious caddy to a savvy investor, demonstrating that a sharp eye for opportunity can lead to significant gains, a concept he calls "tenbagger." As he guides readers through various investment philosophies, he emphasizes the importance of understanding your own financial status, the nature of the market, and recognizing qualities within companies that often go overlooked but have huge growth potential. Lynch’s method is simple: invest in what you know, do your due diligence, and focus on long-term earnings rather than short-term market trends. This approach turns the seemingly high-stakes world of stock investing into a more accessible and potentially rewarding practice for investors at every level. List of All Books I have Shared →

TechnoFunda 101 - Power Capsules

Learn technical as well as fundamental concept in a simple way

Operating Leverage: Simplifying the Concept for Better Understanding

Operating leverage is a crucial concept in the business world, especially when it comes to understanding profitability. In essence, it's about the relationship between a company's fixed costs and its profits. But let's break that down into something more digestible.

Imagine running a lemonade stand. You pay a certain amount to set up your stand (let's say for the table, pitcher, and initial stock of lemons and sugar) – these are your fixed costs, expenses that don't change no matter how many glasses of lemonade you sell. Now, if you sell enough lemonade to cover these costs, every additional glass you sell mostly contributes to profit (apart from the small cost of the lemons and sugar for that extra glass, which are your variable costs).

In a business, this scenario plays out on a larger scale. Operating leverage captures how a boost in sales can lead to an even more significant increase in profits due to these fixed costs. Companies with higher fixed costs (like factories with expensive machinery) have higher operating leverage because once they cover the fixed costs, additional sales don't require much additional expense, leading to larger profits.

However, this leverage cuts both ways. If sales fall, profits can plummet, because those fixed costs remain constant even if less is sold. Thus, while a company with high operating leverage can see substantial profit growth with an increase in sales, the risk is that a drop in sales can lead to a steep decline in profits.

This relationship is measured by the degree of operating leverage (DOL), which is essentially a way to quantify how much earnings can change with a given change in sales. The formula for DOL is the percentage change in operating income (EBIT) divided by the percentage change in sales. It's a handy indicator of the sensitivity of a company's profits to its sales.

Businesses (particularly those that are asset-heavy) experience the advantages of operating leverage differently. Companies like airlines, with lots of fixed costs (think planes and hangars), are prime examples. If an airline fills more seats, the additional revenue from those filled seats goes mostly to profits because the cost of flying the plane is the same irrespective of the number of passengers.

In conclusion, understanding operating leverage is like understanding the weight a financial seesaw can bear. It explains why a small tweak in sales volume can lift a company's profits to impressive heights—or drop them down to losses if sales falter. It's a foundational concept laden with potential but also risks, offering a powerful lens through which to view a company's financial structure and future earnings potential

🚀 My Content For This Week 🎬 YouTube: HOW TO FIND STOCKS LIKE PETER LYNCH​ ​ 📋 Twitter: Vivek Mashrani, CFA @MashraniVivek Wondering how much money you need to RETIRE? A Simple Guide to a Happy Retirement! 🚀💰" Break Free from Work🏃‍♂️ Ever dreamt of ditching the work routine? Let's kickstart the journey to financial freedom... And understand math behind it... (1/n) 5:39 PM • Dec 8, 2023 20 Retweets 60 Likes Read 4 replies ​ 📲 Instagram:

🎙️ 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.

Shivalik Parkview, Ahmedabad, Gujarat 380058
​Unsubscribe · Preferences​