ValueEquity

My take on position sizing , very less spoken about when it comes to process building Understanding this opens up lot more non linearity of gains

Divis labs , breaking myths of many , large gets larger Done really well No reco , biased , of course not at these levels

Happy Diwali to all of you folks 🪔, a year ahead full of learning , thinking and focusing on health as well As a habit I always spend sometime thinking about how I was as an investor and as a person last samvat to this samvat , time goes quickly , sometimes just reflecting on how grateful we should be to everything around us and keeping our heads down , being humble and working hard is what keeps us who we are 🙏 Be kind to people around you , learn from everyone , everyone has something to offer and focus on health , this is my learning’s that I will keep focusing on ..

Books must read , re sharing my list this diwali , as many of you have sent me emails on this: All of Nassim Nicholas Taleb, Investing from Darwin Pulak prasad , Richer Wiser happier and Books on Probabilities and financial history of central banks and Capital returns to understand capital cycles , thinking fast and slow ( against the gods , books by annie Duke) RBI governers - Gokul rathi , The Price of Time: The Real Story of Interest Book by Edward Chancellor Zurich Axioms, The Halo Effect and Against the gods Zurich Axioms : a book that changes my perception on risk every time I read it , risk as a word is very misunderstood , Good to great to Gone by Ajay Sharma Podcast: founders podcast , Nicolai Tangen Norges bank podcast Theres a saying as well that one must study a war general and their tactics to learn as well , even recently watching the Movie Odyssey reminded me of so many lessons that I could apply to the world of investing Alot about investing is learnt from the non finance books , character , courage and persistence ! So much learning available if we are willing to do it , that is why I also incorporate a lot of the learnings I have on my substack audio notes along with the businesses I cover , so do check it out if you are interested ! substack.com/@valueequityin

The toughest part of making a large return is not finding the company that does it for us but owning the cycle For a 3-5kcr market cap company to become 10x , they have to be doing trajectory defining work that enables that movement , even today , many of us know which companies are doing this work , but the goal is not to know , the goal is to own the cycle that plays And trust me it is far more difficult than just finding the name , that is why I keep saying , build a process that repeats itself not a name that you place the ego on , because process will outlast an individual always !

I still remember placing the Order for Laurus Labs in 2023 Muhurat Trading day when the stock was trading at way lesser valuations and also hype factor was way lesser , would I do the same for CDMO companies today in 2026: NO Valuations , Valuations and Valuations today are not in favor for new folks Today focus on the next themes , sab Sambhv hein !

Time Technoplast capex tracker , mapping the earnings push and incremental growth source: internal research , prop

Peptides , 6/10 questions in every pharma/cdmo call is on peptides , Will drop a note in next 7 days on India Peptides tracker Peptides capex , size ,fragments On early stage analysis few things I can say : 1) Ability to provide customised solutions in peptides matters far more 2) Supply security , how much of the cost of the peptide you can control, as capex is massive in India , hence your edge might come from how much you are integrated 3) Validation batches are almost as large as commercial batches It is important to study Wuxi Apptec as well ( TIDES ) to see where the global money is , but this is my basic analysis on the peptides part so far

In CDMO, many people might be disappointed with returns profiles from here , and this is mostly for the smaller players , because it is capacity that will be a large constraint from here , capabilty will be there but without capacity it earnings will have no headroom for incremental growth Focus only on the players who have both Capacity and Capabilty , and hunger , and entry valuations dont pay up too much The only reason I am able to be rational is , because when we entered the CDMO theme 3 years back valuations where not expensive ,today they are , hence we cant have a blanket approach

CDMO, when stutidying this sector , you have to study Chinese Players , earnings updates of Wuxi Apptec and what they are doing on the PEPTIDES 1) TIDES Q1-Q3 revenue up 46.9% YoY to 11.52bn, with full-year revenue expected to grow ~47 2) TIDES D&M customers grew 37% YoY, and molecules grew 86% YoY Lot of Chinese CDMO contracts are also finding way to India , plus China is moving upstream to innovators , we are seeing a lot of global deal making where American Big Pharma is acquiring Chinese portfolios for the R&D but not outsourcing , lot more value And in India only Divis & Laurus have the capacity to deliver at massive scale for CDMO And market is also aware and rewarding us for being early in Laurus over the last 3 years , even Divis today had a blockbuster show Rest of the smaller players are too expensive in my opinion for the capacity that they have , there is no incremental headroom until new capex comes live , and before capex costs come ! No reco biased in Laurus from much lower levels , and Divis

People talk about all kinds of ratios, models , analysis , but no one talks enough about time adjusted returns Is that time adjusted return enough to justify the tracking and holding , hence I always wait for inflection points There are many who obsesses over business and are willing to sit without returns for 3 years , I am not , I will initiate the same business , but with time in my favor Time is one of the most important factor , many dont acknowledge this

Divis Labs great numbers , absolute expansion across all parameters ! Capacity + capabilty = Success in CDMO Many players who just have capabilty and no capacity , earnings will be capped

When a company in my watchlist goes from tracking to initiating , always it has to win the spot , treat it like this You are a capital allocator looking to allocate in the best business so you can generate a higher risk adjust return than the market , there cannot be any soft spots or biases , the company has to prove the need to be there , use the edge of being an investor in your favor , don't fall for stories /narratives or themes You are a capital allocator looking to make returns as a shareholder with good entry valuations , rest all is later

Dont fight terminal value risk citing cheap valuations , that is the only part where being a value investor is going to back fire , market always knows more , be humble to accept it rather than frustrated why a 12 PE stock is not going up .. Industry structure , terminal value all are important , not just deep value , sets the wrong expectations ..

Time Technoplast , constantly delivering such good numbers , in my opinion it is a matter of when not if the market wil recognise and reward it.. Great numbers , especially in this macro and their region of businesses Valuations have also corrected on the multiples while growth has remained When it happens is my question , not if

Dissapointment in returns is exactly the gap between narrative and execution The business was never the problem , the expectation was !

I usually avoid companies that are below 500 cr market cap as lots of asymmetries in information , and I am just not comfortable with that lack of clarity and depth of information , if it is a truly great business then we will definitely get much better opportunities as it grows I don't go to places where I know can get burnt ! Has helped a lot across years