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. RVNL: RVNL secures Rs 447 crore contract from Delhi Metro for Phase-IV Viaduct construction. Company expects to win sizeable bids this year, Rs 22000 crore turnover in FY26.
2. Sun Pharmaceutical: Company announced the launch of LEQSELVI™ in the U.S. for treating severe alopecia areata.
3. Astrazeneca Pharma: Company Receives Permission to Import Durvalumab for Additional Indication, Permission Allows Marketing of Durvalumab Solution in India.
4. Tara Chand Infra: Company has been awarded a contract by SAIL for consignment and handling services, the contract is valued at Rs 81.51 Cr.
5. Railtel Corp: Company has received a significant work order from East Central Railway. The order, valued at Rs 264.07 Cr.
6. Powermech: Company received order of ₹498.39 crore from SJVN Thermal for the Buxar Thermal Power Project, second order worth of ₹52.96 crore from Jhabua Power Limited for operation and maintenance.
7. Sambhav Steel: Company reported a 47% year-on-year growth in total value-added products at 79,717 tonnes
8. Biocon: USFDA approved insulin biosimilar to Novolog
9. Cupid: Company has made a strategic Investment in Gii Healthcare Investment Limited to Enter the Middle Eastern Healthcare and Personal Care Market.
10. Godrej Properties: Company acquires 50 Acres of land in raipur; estimated saleable area at 9.5 Lakh Sqft
11. Lupin Ltd: Company announced the launch of Loteprednol Etabonate Ophthalmic Suspension, 0.5%, in the United States.
12. Emcure Pharma: Company announces partnership with Sanofi India to broaden reach of Sanofi's Oral Anti-diabetic drugs.
13. Marathon Nextgen: Sageone Investment Managers bought 3.7 lakh shares at Rs 740 per share.
14. Afcons Infrastructure: Company has secured two road construction projects as the Lowest Bidder (L1) from Croatian Motorways Ltd.
15. Bharat Forge: Kalyani strategic systems incorporated joint venture aegis advanced systems SL in Spain.
16. NTPC Green: Centre clears Rs 20,000 crore investment limit for NTPC's green energy unit.
17. EMS: Company Receives Approval for Rs 194.6 Million Project.
18. Godrej Properties: Company acquires 50 Acres of land in raipur; estimated saleable area at 9.5 Lakh Sqft
19. Premier Explosives: Company secured $12.24M export order for defence explosives to be delivered within 12 months.

TechnoFunda Investing Quote from Legends -

Peter Lynch’s quote, “Everyone has the brainpower to make money in stocks. Not everyone has the stomach,” highlights that investing successfully isn’t just about intelligence or knowledge—it’s more about emotional discipline. Most people can understand the basics of investing, but very few can stay calm and committed when markets are volatile. Fear during crashes and greed during booms often lead to poor decisions. Lynch is emphasizing that the real challenge in investing lies in managing emotions, having patience, and sticking to a sound strategy even when it feels uncomfortable.

📚 Book I'm Reading This Week The Tao of Charlie Munger The Tao of Charlie Munger is a collection of timeless wisdom from Charlie Munger, the vice chairman of Berkshire Hathaway and long-time business partner of Warren Buffett. Compiled by David Clark, the book presents Munger’s thoughts on investing, decision-making, human behavior, and life in a series of short, insightful quotes and commentaries. It distills Munger’s multidisciplinary approach—drawing from psychology, economics, and history—and offers practical lessons on rational thinking, integrity, and the power of patience. The book serves as a valuable guide for anyone seeking to think better and live wiser, both in business and in life. List of All Books I have Shared →

TechnoFunda 101 - Power Capsules

Learn technical as well as fundamental concept in a simple way

Understanding Dilution – The Hidden Cost of Growth Investors Often Ignore

When companies raise capital, especially through issuing new shares, investors often panic about “EPS dilution.” But is that always the right metric to worry about?

Let’s unpack this critical distinction between EPS Dilution vs. Intrinsic Value Dilution — and why true investors must understand it before reacting to headlines.

​

🧮 EPS Dilution ≠ Value Destruction

Earnings Per Share (EPS) dilution happens when a company issues additional shares, reducing the earnings attributable to each existing share. While this may look negative on paper, not all EPS dilution reduces shareholder value.

​

What really matters is whether the intrinsic value per share is diluted. If new capital raised generates higher long-term returns than its cost, intrinsic value per share may actually rise — even if EPS temporarily falls.

For example: If a company raises funds at or above intrinsic value to finance high-ROCE growth, it may expand shareholder wealth despite lowering near-term EPS.

​

⚖️ Intrinsic Value Dilution – The Real Risk

Dilution becomes dangerous when:

• Shares are issued at prices significantly below intrinsic value (e.g., to insiders or for poor acquisitions).
• Capital raised is deployed into projects with poor return profiles.
• The decision is driven by short-term metrics like EPS, not long-term value creation.

A company may report higher EPS post-merger or share issue, but if the return on capital is low, the per-share value might still erode. This is especially risky when management is incentivized to grow size or EPS, not intrinsic value.

​

🚫 The “Double Whammy” Effect

Companies that dilute intrinsic value while also sacrificing transparency or smart capital allocation often suffer the “double whammy”:

• Low price-to-earnings (P/E) multiple from the market.
• Downgraded perception of management quality.

​

📉 Classic Pitfalls in Operating, Financing, and M&A Decisions

Many irrational managerial decisions that prioritize EPS boost over value creation include:

• Cutting critical long-term expenses (e.g., R&D, advertising) to raise near-term profits.
• Issuing shares even when internal accruals or debt could finance growth more effectively.
• Acquiring other companies to expand empire size at the cost of dilution in per-share value.

​

💡 Buffett’s Wisdom (Paraphrased)

“If you own 120 acres and merge with someone who owns 60 acres equally, your holding is now 90 acres. EPS may go up, but your economic stake shrinks.”

​

💬 Key Takeaway

Don’t confuse “growth in numbers” with “growth in value.” Dilution is not inherently bad — it’s the context that matters.

Ask: Does the capital raise increase per-share intrinsic value?

If yes → dilution may be acceptable.

If no → it’s value-destructive, regardless of what EPS shows.

Let EPS be a supporting actor — not the star — of your investment thesis.

​

📌 Focus on:

• ROIC of new capital
• Alignment of management incentives
• Long-term value creation, not just accounting figures

In investing, the best decisions are those that grow wealth sustainably — not cosmetically.

🚀 My Content For This Week 🎬 YouTube: How To Ride Turnaround Stocks | Technofunda Process​ ​ 📋 Twitter: Vivek Mashrani, CFA @MashraniVivek Turnarounds seldom turn around. But sometimes, all it takes is the right leadership to spark a new beginning. The business cleans up, profits returns, and investors who spotted it early… WIN BIG Here’s what happens when a real turnaround begins — through an interesting 5:52 PM • Jul 19, 2025 1 Retweets 6 Likes Read 4 replies ​ 📷 Instagram: 5 Growth Stocks Filters 🔗 Linkedin: This is what I wish someone told me at 23 about money.​

🎙️ 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​