20-20 Ideas Summit 2023

Speaker 1 G Maran
- What if the life expectancy rate of India was and is now?

- How many credit card holders? About 5%
- How many have passports? About 5%
- How many Indians have demat? 5%
- How many Indians pay Income Tax? 5%
Why is every economically sensitive number coming to 5% of India? It's actually not 5% of India..look at
household data.
Why is this number important? Domestic consumption is often misused.
17% of our gdp is exports. There we have month wise, country wise etc data. 62% GDP is domestic pvt
consumption and we don't have or have wrong data on it. If you tell someone Punjab has more vegetarians than
Gujarat, they will laugh at you.
When you suddenly see more crowd at airports, malls etc is it because Indians are eating out more or more
Indians are eating out?
It's because affordability has changed. Thanks to women participation in workforce. Women in 30-40 age
consume way differently than they consumed before. And one interesting area is healthcare.
The stock idea is Narayana HealthCare.
Healthcare expenditure in india is rising. Especially high growth in last 5-6 years. Number of doctors graduating
will cross 1L this year and active doctors in India are 8-9L.
The company PAT was in a range up to 2020, then boomed post 2021. Cumulative pat from 2011-21 was 393cr,
and in FY 22 + 23 it's 937cr. They accidentally put up a hospital in Cayman Islands for tourism + medical aspects -
the project didn't succeed until covid happened and locals were forced to use this hospital.
Company's payor mix is good - insurance is 1/3rd of bills now.
This is a company which has proved execution capability. Cayman Islands hospital is a optionality. Good
governance. Earnings growth of 15-18% looks reasonably set with option of PE re-rating.
Audience Q: valuations?
Maran: it's not cheap, but it's not expensive. Not paying a premium to participate in potential growth. It's the
earnings growth and consistency that will help maintain the PE and improve it further. It's not too cyclical so PE
may sustain. Here the thing is capex is significant and the payback period is 5+ years and it's a risk. It's like a
movie, only after a movie you'll know if it works or not.
Held on 18th Feb 2023 at IIT-M Research Park | Notes compiled by: @akshat96jain
Disclaimer: Stocks are discussed for educational purposes only. Not to be construed as a recommendation by the speaker. Please consult your financial
advisor before acting on this discussion.
Speaker 2 Ravi Dharamshi
Kaynes Technologies
Electronic Manufacturing Service. EMS.
China has become middle income. Demographic issue due to one child policy. Labour scarcity and higher cost. So
India will naturally have the largest and youngest workforce. China/Europe+1 and hence India is now globally
competitive for this segment.
Globally this is going to become a 1.1 trillion $ industry and electronics component is as large as auto
components. In India auto components are localised 80%. In electronics it's just 3%. There is huge scope for local
manufacturing. India has very minimal exports too.
India has a large trade deficit and besides oil and gold, we import a lot of electronics. There is no choice to start
making electronics for our own and world's need. We have started making locally but value addition is very low
(around 18%). But even for china is 38%. This is how nations start and we'll move up the value chain.
There are very few industries that can grow 30-40% for years and this is going to be one such industry in India.
Within EMS
PCB is a large opportunity.
Kaynes Technologies is like Gundappa Vishwanath. Another gem from Mysore.
Promoter was L&T Mysore Intern. He did ice cream manufacturing to trading of exotic plants. Finally esdm. First
set of employees from BEL, BPL.
Revenue profile Is quite well diversified and is moving to the value chain. Everyone starts with assembly, but
should move to box build. Kaynes now has clients across automotive, industrial, medical, railways etc. Hardly
raised any money.. mostly during the IPO only. Company ranks high compared to peers. Working capital risk is
there - inventory days and receivables are high.
Across industries average customer life is upwards of 5 years. Order book was 300c 2 years back and is now
2500crores. This rate of growth is going to sustain too.
4-5 years into capex, roce can jump to 25%+.
So without dilution, we are getting a 30% growth, 13-15% margins and 20-25 ROE company.
Speaker 3 Vikas Khemani
Magic Basket. What does it mean?
We have this framework. Big money is made when we get earnings growth and valuation re-rating.
Good business, average or poor management and there is a change in management. Where new management
can change trajectory of the company. This situation provides situation of accelerated earnings growth.
For ex: TCS post 2009. Chandra gave us a 5x growth. Same with icici. So this is important to us when we look at
Ideas.
Stock is Aditya Birla Capital. AB Capital. Was part of Indian rayon then got spun off and listed separately.
One of the largest nbfc loan book and started as a wholesale lending company. But post ilfs most of the wholesale
lenders got de-rated. But here a transformation happened.
Here you have to first ask what do I like about this co?
- liability side - Because of strong parentage, they have access to capital at same cost as Bajaj finance. Mahindra
too had npa of 10%+, but due to parentage they still had aaa+ rating. Couldn't say the same about Edelweiss.
- Last 5 years they moved away from wholesale to retail lending. Top line didn't change so it went unnoticed by
market, but internally they were changing.
- Largest non bank mutual fund, decent life insurance, great health insurance biz, etc. Transformation of last 5
years has been ignored by the market.
- Now sme and retail is 60-65% and wholesale risk is now diversified.
- They are working on cross selling, distribution, channels etc.
Despite all this something was missing. Now a new CEO was appointed, Vishakha Mulye from ICICI top stable
(exec director). She has performed top roles at icici across functions.
- When we speak to employees, they said there's a sudden increase in energy, enthusiasm, etc. They say they
don't know when the last time a CEO visited the branch. These are small things that will go a long way.
- According to me, CEO plays a big role. Focus will be to build scale, a 25-30% growth guidance, with good capital
adequacy ratio. We see a transformation exercise happening here. From a no differentiation wholesale and slow
loan growth nbfc to a 15% roe, digital focused, lower risk with cross selling capabilities nbfc we see potential here.
- This is also a re-rating recipe. There is no mutual fund holding (surprising for a 35k crore company). Also just a
5-6% float as HNIs holding good chunk.
- Risks - slowdown, usual retail stress, changes in budget for life insurance cos, etc.
- We see mcap doubling to a 3-4x in 3-4 years.

Speaker 4 Aditya Khemka
If you invested 100 in nifty 50 10 years back, Nifty 50 today would be 300.
BSE healthcare Index would be 315. So you would've outperformed by going for healthcare Index.
But BSE HE Index has 2 halfs. Top half is sun Pharma, Dr Reddy, etc. They sell unbranded drugs that don't have
differentiation in export markets. They don't make money and they haven't made money in 9-10 years. Because
theirs is a pure demand supply situation where If demand in us, Europe is X then capacity is 1.5X thanks to Indian
manufacturing.
Had you invested 100 in top half you would have 200. Had you invested 100 in bottom half, it would've become
600 in 10 years.
You have been sold a lie that large companies are safe, robust. That's a lie. Sun Pharma was 1200 and today
after 9 years is 900.
So instead we focus on bottom half of the index. There are 5 types of cos (buckets)
1. Unbranded generics - pricing pressure, competitive, undifferentiated. We just spoke about this. We don't like
this. Not worth visiting.
2. Branded generics - this is interesting. Pharma equivalent of FMCG. If you have fever, doctor says crocin and
pharmacy gives you crocin. How many of you what's the price of crocin? You don't know because you don't care -
if it's 25, 40, 50 etc you don't care.
3. APIs cdmo - India was biggest in 1980s but we reduced due to pollution. Then China gave subsidised power,
labour and land. But now things have reverted and China doesn't have any extra arbitrage now.
4. Hospitals - negative working capital. Maran sir explained as well
5. Diagnostics - during covid everyone was talking about this. However while earnings went up, multiples went up
even more. Why was 2 years of extra earnings given multi year extra multiples? Now the multiples are de-rating to
below their averages. Now this lollapaloza is an opportunity.
Best time to invest is when the earnings are below long term means and multiples are below long term means. As
earnings and PE normalises, we not only make earnings growth but re-rating growth as well (assuming earnings
and multiples grow).
The idea for today is Krsnaa diagnostics. Krsnaa is a discounted player, so is better positioned due to online.
I like players who play the volume story. Krsnaa is basically a b2g player. 40% of India's healthcare is owned by
govt. Krsnaa sets up diagnostics centres via tender route.
IPO in Aug 2021 (covid frenzy). IPO was at 950, today they're at 350.
Management has guided 2x topline and 3x bottom-line growth in 2 years.
Rationale is simple - you generally don't invest in b2g due to receivables. Krsnaa has a 90 day clause with
government. If payment doesn't come, they shut the labs. This can be stressful for the govt. They did that in
Himachal and got back the money by the 100th day. This is why Krsnaa gets money on time.
Reverse DCF tells me 3% top line growth for 6-7 years. We believe a 10-18% growth is possible.
Anti-thesis: IT raid report was a risk (tho we believe it's not true). Pricing pressure due to online.
Speaker 5 Sanjeev Pandya
UPL
- I was looking for a disruptive industry. Agriculture was one such. In that cleantech was an agenda. Another
question was are we a natural owner of that industry? Are processes innovative?
UPL is not a company but an entire ecosystem. It's like a horse bought a horse and together they are looking to
buy a cart.
UPL - One of the world's biggest buyers of soft commodities. Multiple plants, deep processes, various products.
This was the old UPL. Then came the Arysta acquisition. Now what is coming up is the world's biggest non patent
manufacturing and distribution company. As well as manufacturing and distribution for patent-ed chemicals.
UPL is now locking in the farmer, getting unique soil health data, seed productivity etc etc. With the
customisations they have, they are building the biggest farmer platform in the world.
They are in touch with 120 startups who have molecules but no distribution. And they all have to come to UPL.
UPL is the 5th biggest, but the top 4 are patent players and once things go off patent, it will come to UPL.
India is the 2nd largest agricultural nation and largest agrarian nation. India has 50% extra rainfall. If we get our
fertilizer process correct, then UPL can play a big part in Indian agro chemical story.
UPL has done 53 acquisitions in 25 years. Most value is created when diverse parts of biz integrate. Market
doesn't see this.
Debt has just seen end of cliff and any revenue growth will hit ebitda growth. Market doesn't see FCF but
company is seeing FCF with which it has paid off Arysta acquisition debt and is now paying working capital debt.
It's a Lego brick company which will continue to re-invest to become world's largest agei chemicals company.
Speaker 6 Jatin Khemani
Big Bull says bet on 'change' (earnings growth, quality or re-rating).
The company makes steel wires and ropes. Applications: Elevators, Cranes, Offshore cranes, bridges, etc.
Replacement cycle: 2-4months in oil & gas and 20 years for suspension bridges.
For this company, the biggest demand 75% is consumables so frequent demand and 25% from infra and capex.
Mission critical application - cost of failure is higher than cost of ownership. Approval cycle for new vendor is 3-5
years. Highly specialised and value add products.
Ebitda per ton is 20k per ton but other steel guys make 4-5k ebitda per ton.
50% market share, 6% globally and 90% in Indian ports and leading supplier to Otis and leading crane
manufacturers.
Steady biz, leadership, high margins etc. Should be trading at 10-12k crore? But its at 5k crore.
Reasons? Why is it out of radar?
- absolute absense of growth. Weak demand and oversupply

- bankruptcy risk in 2018
- family feud over control
Last 10 years top line moved 1600 to 2000 cr. Ebit also flat.
Now what's changing?
- global demand seems to be moving. Oil & gas, mining, infra, real estate etc.
- global supply - China isn't a risk here because they are self sufficient and negligible in trade. Korea is large but
high cost. So changing dynamics and cheap steel price in India is a big boon for this co.
- Running at 85% capacity. Investing 300cr for increasing capacity by 25%. This will be for elevator ropes which is
a high margin segment.
- Indian peers such as Bharat wire and bedmutha are struggling due to WC, debt issues.
Complete transformation
- In 2018, there was 5000cr if debt and in 2022 they became debt free
- Issue was due to a steel plant that they put up 10 years back. They sold it to tata and paid off debt
- Femily feud is also gone with Rajeev clearly leading the co now.
Recent trigger. Capital allocation, dividend 25% payout, capex in good product mix. No sell side coverage and low
institutional ownership.
In 2017, a 1k crore mcap, 5k crore debt and loss making.
In 2022, 17% roe, 270cr profit, 5k crore mcap and a PE of 20.
We foresee a 650-700cr ebitda and 400-450cr net profit.
Overhangs? Ousted brother continues to sell in the market. Still owns 15%. 400cr contingent liability but it's not a
material case.
So a solid ocf, robust BS, focused product line, pays full tax rate, diversified client base, big4 auditor, dividend
payout 25%+, no obvious leakage and new promoter buying from open market.
So in summary a case of variant perception. Street looks at it like a steel mill with a fractured balance sheet ruined
by family issues. But it's different.
From CMP, expect 50-100% return in 2-3 years.
Disclosure: part of stalwart and personal portfolio. Personal views, so could be wrong.
Company is Usha Martin
Speaker 7 Mehul Bhatt
(Disclaimer)
We like companies with a management change apart from

1. mispriced biz
2. spin-offs / special situations and
3. Long term compounders
Quiz: Guess the company
1000cr+ profit
Single digit multiple
Roe>18%
Dividend yield 4%, payout 40%
11% revenue growth, 15% profit growth, Roe 17%.
Redington India.
$9bn distribution and supply chain solutions provider. Operate in 40 markets and partner with top electronic
brands.
They have 2 divisions:

1. IT biz of server, storage, network, etc
2. Mobility biz of distributing devices.
The 2nd is an interesting space as it's a low margin, critical model but it's moving from a pure product based to a
service led model.
Growth is there in both the IT, mobility and logistics biz.
70% revenue from IT, 30% from mobility. Apple is 30% of the biz (majority from iPhones). In IT, cloud is
interesting. They not only sell hardware but also software connected to hardware and cloud is 5% of the services
biz. Core biz is 2.5% margin whereas cloud is double digit margin biz. Overall margins should rise over the longer
term.
So a transition from hardware to a hardware + software & solutions. From physical/server to a digital/cloud. From
low to high margin and self-,leadership to externally hired.
Logistics Subsidiary is a small biz of 400-450 crores (pro connect Integrated logistics).
Risks
1. Apples own store & online
2. Overheads
3. Geopolitical
4. Familiarity with family led companies in India than professionally led.
5. Working capital and interest rate risk
Speaker 8 Amit Jeswani
Profit pools of industries are dominated by 2-3 companies at Max.
Take bags marker. VIP and Samsonite list market share to Safari and the same can be seen in their stock price
CAGR. So a large industry size, a player is gaining market share every year so your drawdowns will also be lower.
Even shoes market - Mirza trades at 1/4th the mcap of campus whereas it has a higher profit.
So we need to find leaders gaining market share. Initial frame work is this, later we see valuations and risks. But
first market leadership.
Take 2W industry. eicher went from <1 10 yrs back to 11% share and stock went up 2200%. Similar with TVS.
At Stallion we bet on a basket of cos who are market leaders in predictable industries and are gaining market
share and are re-investing at high rates of returns.
Same story with apl Apollo and insurance sector.
Policy Bazaar
- mcap of 22k crore

- J curve has started. Platform biz
- if m share goes to 3%, expected pat of 2k crores
Speaker 9 Ankit Kanodia
RateGain Travel Technologies
New age companies is almost an abusive word nowadays. And market sometimes paints everyone with the same
brush.
We look for an ancillary ka ancilliary when we look at a sector.
When we see travel as a sector, we look for hotels / resorts, then we look for OTAs.
But RateGain is an ancilliary to OTAs and is used in the background by many. There's a saying "best of the
platforms are invisible".
If data is the new oil, what is RateGain?
RateGain takes travel data, stores data and refines / create insights of this data.
Major customers are large hotels based out of US, UK.
If I check into a hotel and tomorrow's there's an IPL match, the hotelier doesn't know he can sell me an IPL ticket.
This is what RateGain does.
1. MarTech
2. Distribution - Acquired dhisco. It was in losses. In 9 months they turned it profitable. They simply changed their
data centres from us to India.
3. Daas (Data as a service) - go to hotels, say that you give me data, I'll give you insights on your competitors.
Hotels have a problem of perishable inventory. So they have a need to optimise.
This co was started by a Bhanu Chopra and owns more than 50% stake even after IPO. Profitable from 1st year.
More than 2300 customers. Across OTAs, Airlines, Hotel Chains, package providers, Car rentals, etc.
Post 2014, have acquired and grown majorly through acquisitions and have a very sound M&A process. They
haven't paid more than 1.5x sales even for a tech company. Recent acquisition of Adara during covid was also
very smart.
Space is competitive but advantage is RateGain is the only integrated player.
No capex need, no cyclicality. So earnings growth + asset light + superior biz model means multiples will be
higher than traditional businesses.
Was trading at 18 times sales during IPO, but now it's at 9 times sales. Expect it to trade at 5-15 times sales.
Speaker 10 KR Senthilnathan
Furniture consumption has changed:
Teak wood -> carpenter -> passed on to next gen.
Due to urbanization we don't have space for large furniture. More comfortable with readymade furniture.
We are shifting from teak and plywood to MDF (medium density fibreboard).
MDF is smooth finish, cheaper and easy to fix. Only disadvantage is it can be screwed only 3-4 times.
Wood Panel industry is 28k crores and MDF is 3k cr market. Expected to grow to 6k crore by 2026.
MDF industry has 70% organised players due to high entry barrier whereas plywood is 30% organised. This is
mainly due to procurement chain.
Greenpanel
Demerged from Greenply. Roe, roce etc are above 30% indicating quality.
MDF has 2 grades - interior and exterior grades. With innovation, there are good MDF grades which can absorb
moisture as well. Exports realisations are lower than domestic, so when exports rise margins slide.
2019-22, revenue and PAT grew. All good things happened and stock also moved from 30 to 600 rs.
But last quarter, revenue is flat, margins are flat. Why? Huge exports/dumping from Vietnam, Indonesia to India.
Concerns:
- Duties on Imports not yet approved
- US consumption of MDF may hit a bottom
- Imports don't impact greenpanel much as greenpanel mostly does value added panels whereas imports are
mostly plain MDF.
Valuation
Approx 360cr cash generation per year
Working capital is just 25 days approx
So 10.5% cash yield from absolute pov
Relative valuations are also generous
Speaker 11 Aditi
Kirloskar Oil Engines
(Disclaimer)
- 77 year old flagship biz of Kirloskar group with strong reputation

- 4.5k cr mcap. 4k cr sales
- Power & Industrial engines are 68%. Agri & Farm equipments are 26% and a nbfc contributing 6% (unrelated
diversification)
1. strategy to grow sales 2x in 3 years

a. Genset - power theme - power shortage in India and abroad. Increasing share of renewable energy. Renewable
is fluctuating source so needs genset to balance loads.
b. Engine - infra theme

c. Huge exports potential
d. Double digit ebitda margins
2. New mgmt
3. Value unlocking potential
Trading at discount to peers and historical multiples.

Nbfc monetization to unlock value.
4. Risks and downside
- Execution risk
- Potential demand slowdown after summer
- Raw Material price risk
Growth story, margin expansion and value unlocking potential through string execution and nbfc monetization
Speaker 12 Niteen Dharmawat
Greaves Cotton
(Disclaimer)
- 160+ year old company

- In Automotive segment, provides power train solutions + Ampere electric 2W & 3W
- Non automotive - gensets and related industries
EV
- new ev battery norms caused some challenges in revenue but co is moved past this
- ebitda is higher in 2w and will increase for 3w segment too
- 6th largest ev player in India. Greaves gets fame subsidy whereas hero / Okinawa doesn't get.
- acquired bestway agencies which seller e-3w rickshaws. So acquiring 100% of Excel controlinkage.
- Saudis invested 220mn$ in Greaves electric mobility (gem) for 36% stake. That deal itself values gem at 3000cr
which is mcap of Greaves Cotton itself.
- Topline and margin profile set to change
Big 4 auditors.
Risks
- Subsidy change
- War escalation can hit raw material supplies
- Raw material price changes
- Power train biz has competitive landscape
Speaker 13 Abhijit Choksi
HBL Power Systems Ltd
Current revenue split is Batteries - 64%, Railway & Defence - balance.
I expect batteries to become 1/3rd and railway & defence which are better margins to become 2/3rd.
Last 5 years, operating margins have moved from 7-8 to 12%. In batteries they have moved from commodity to
premium products thanks to hiring Mr Suresh Kalyan (ex Amara Raja).
But story here is not batteries but railways and defence. HBL is one of the 3 approved companies in railways.
Flagship products in TCAS & TMS. These products alone can alone double ebitda by FY 25, owing to higher
margins.
Risks:
- Keyman risk (Mr Prasad's age is 75)
- No cost pass through. So margins can get impacted
Current PAT 98 crs, cash 100cr, mcap 2800cr. In 3 years can do 2200cr sales, 400+cr ebitda and 300+cr pat. So
trading at 10x fy25e.
Speaker 14 Dayanand Deshpande (Darshan Shah spoke on his behalf)
- Started as Asian paints division, then spun off

- Significant player in synthetic rubber and latex.
Has wide application and client base, no single industry or client contributing majorly and is also investing in B2C,
branding etc
- Long growth runway. Apcotex is 1/27th in size to Synthomer (UK).
- Huge upcoming capex.

- Promoter started buying.
- Margin profile improving.
Risk
- weakening demand
- RM price rise
- import dumping
Speaker 15 Deepak Shenoy
LIC
3 principles
- be agile: beliefs, not identities

- stocks don't live you back
- price often tells you about a stock
Why LIC?
- Aggressive, large, mature insurer

- Valuation: low enough to give room for comfort at 4L cr
- Triggers
• profitability spike
• one-timers to away
• non-participating biz focus
- Risks
• PSU
• Dilution by govt
• Tax changes
• Competition wants market share
Roughly 65% of market share in new business premiums. 97% share in group.
Earlier structure was profit sharing with policyholders and govt. Now in Jan 2022, it has become a company. This
is participating vs non participating.
In participating, max 90% profits will be given to policyholders and 10% to shareholders (currently 95-5, will
change in 2 years). 66% policies are participating.
In non participating, 100% surplus goes to shareholders.
So every quarter 6k crore + is transferred to shareholders.
Even the management didn't know this until sept 2022. Because they don't have a history of ever managing
shareholders separately.
Insurance penetration continues to grow.
Speaker 16 Vidya Bala
Mill Liners are critical components for mining. Not too many suppliers globally.
Gold 42%, copper 33% contribute to the mill lining industry.
Company is Tega Industries. IPO in Dec 2021.
- High promoter holding

- DII holding is now 7.5%
- 2nd largest globally in polymer based mill liner industry. Overall in mill liner space it's 5th largest (top 5 have 60%
market share).
- 3 plants in India and others in Chile, South Africa and Australia via acquisitions.
- Sales expanded 15% annually and net profits by 62% in 3 yrs. It's not a volume play but a high realisations /
margin play as it aims to ensure longer lasting machinery for customers.
- Positives
• Less project to mining industry capex cycles
• Breakthrough product
• High moat & margins
• Global footprint and capacity additions
• Less prone to capex cycles as it's a consumable
• Steady prospects for end user industries - copper, gold etc for EV, batteries etc
• Decline in ore grades a positive. Ore grades are coming down in copper and gold. So equipment need to be lot
more efficient.
• DynaPrime is a breakthrough product made of steel and rubber and is a leader product. Hugely successful and
expected to give 25% growth and 35% more realisations.
This is a bet on a single product.
There may be significant investments in Chile. Debt is just 0.25 so scope to borrow and invest is there
Risks:
- Product concentration
- Emerging nations
- Erractic turnover in business
Valuations are fair now and one may look at corrections before entering.
Speaker 17 Kumar Saurabh
Sudarshan Chemicals
"history never repeats but often rhymes"
(Disclaimer)
- Pigments space. Pigments are colorants

- We like companies going through a pain period. Sudarshan is going through last 3 and 10 years low in margin. Is
this volatility or permanent loss in business?
- In India they have 35% market share. Globally has become 3rd biggest from being 18th biggest. Is the current
situation a structural or cyclical situation?
- To answer this we'll study biz and financial cyclicity. Pat margin fluctuated in the past from 2-3% to 7-8%. High
demand - High capex - demand falls -, High interest costs and low profits - High demand comes back, etc etc
- Revenue is 3x from before now even though margins are below mean. We expect mean reversion. Maybe a 2-3x
in 5 years. Because there's pain there's value emerging.
Risks
- Demand side
- Supply side
- Most risks are already playing
Speaker 18 Sandeep Daga
Fino Payments Bank
- Next growth in banking would come from Bharat.

- New age co, got bunched with other fintech
- Started to offer services that icici would otherwise not offer. Finally received payment bank licence and launched
fino payment bank licence
- Only 20% ATMs in rural India where 65% population resides
- Nearly 40-45% households don't have access to banks / ATMs
- Fino converts merchant store to banking outlet. Merchant can do assisted banking service like cheque collection,
cash withdrawal, cash deposit, remmitances, micro ATMs, etc.
- Very efficient, tech led operations. Merchant outlets have 0 risk because tech ensures deposit of merchant
partner who is with fino, never exceeds the limit.
- Payments Bank are not allowed to lend so they can put money in Gsecs and make a 300-350bps soread
- They also do cms, which is helping corporates do cash collections
- Experienced top management
Risks
- Drastic reduction in legacy products due to switch towards UPI
- Expansion by other payment banks can impact margins
- Failure to cross sell may limit profitability
Speaker 19 Sivaramakrishnan R
It takes 10-15 years of hard work and when the moat blossoms, the ROCE blasts. Take Intel for example in the
b2b space. The moat it has made. Think of any b2b co in India with a similar moat?
Industries with great potential and which have listed options is in defense tech.
- Those who don't want to buy from Russia, China have to buy either from Germany, US or India.
Company is Data Patterns
- 2.5x order book

- Infra is created for 2.5x FY22, so operating leverage is high
- Chennai based co
- Make in India opportunity
- Market opportunity for one of the products is 10-100x the company's turnover
Speaker 20 GR Balaji
- Strong ownership structure

- Profitable biz model with good industry structure
- Growing total addressable market
- Risks
Framework of finding this stock:

- Benchmark setter and execution machine. Opportunity in India's growth from 3 to 5$tn opportunity
- Stability Provider (all weather stock)
- In 2002, entire yearly profit was converted in 2007 to quarterly profit.
- This stock has compounded 21-22% on a 10 year basis and it's done better than market every year
- Growth at scale. It's the 3rd most profitable company out here
The company is HDFC Bank
- Not even a 30 year old company

- Granular deposits, customer engagement and cross selling, risk management and well capitalised
Is management thinking long term? Yes, Investing in tech and looking at rural initiatives.
Revenue drivers?
- Healthy credit growth (12-13% system levels Nd HDFC grows 4-5% above system)
- Gold loan offering
- Expanding wealth management
- 70% HDFC Ltd customers don't bank with HDFC Bank
- Value unlock in hdb financials or HDFC securities
Margin drivers
- Mix improvements (Retail:Wholesale mix improving)
- Higher fee income in wealth management and gold loan
- Opex cost is high now but should normalise
- It's not a cheap stock, but historically stock trades at current levels
Risks
- Operating costs
- Ability to build superior deposit base?
- Merger related regulatory issues
Closing remarks Shyam Sekhar
- Investing isn't just about finding ideas but rightly valued ideas. You may buy Infosys at its peak and still feel
you've not gone anywhere today
- What makes us think that just knowing great ideas is enough?

Just knowing right ideas isn't enough.
Just directly starting into equity investing isn't a great idea. 2020 and 2021 was like playing 20-20.
2022 is like ODIs where you need to play and stay longer.
2023 will be like test cricket where your patience will be tested even more.
Sure the ideas are great but learn to pace them correctly.
Sharpen your decision making skills. First is what stock to buy. Second is what level to buy. At the first level you
need to play late, take time. Second is to actually be very clear in only hitting the loose balls.
Culturally we are not used to this as we want to move the score board ahead right now.
We should improve our behaviour and sharpen our decision making skills. We have to work on our equity
research. We have to be better at this research than the rest of the world.
Funnel your ideas and create a focused universe. New themes, ideas etc come everyday but the problem is you
still need to have a structured approach and wait for valuation comfort, etc. We have two years due to elections so
we have time to work on these things.
The ideas from today should help you think for yourself. Find your own idea as good or better and draw parallels
and then you need to take your own ideation forward.

20-20 Ideas Summit 2023

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Speaker 1 G Maran

- What if the life expectancy rate of India was and is now?

Why is this number important? Domestic consumption is often misused.

The stock idea is Narayana HealthCare.

Company's payor mix is good - insurance is 1/3rd of bills now.

Electronic Manufacturing Service. EMS.

Kaynes Technologies is like Gundappa Vishwanath. Another gem from Mysore.

4-5 years into capex, roce can jump to 25%+.

Magic Basket. What does it mean?

- We see mcap doubling to a 3-4x in 3-4 years.

4. Hospitals - negative working capital. Maran sir explained as well

Big Bull says bet on 'change' (earnings growth, quality or re-rating).

Reasons? Why is it out of radar?

- absolute absense of growth. Weak demand and oversupply

Now what's changing?

We foresee a 650-700cr ebitda and 400-450cr net profit.

From CMP, expect 50-100% return in 2-3 years.

Company is Usha Martin

We like companies with a management change apart from

Quiz: Guess the company

They have 2 divisions:

Growth is there in both the IT, mobility and logistics biz.

Profit pools of industries are dominated by 2-3 companies at Max.

Same story with apl Apollo and insurance sector.

- mcap of 22k crore

RateGain Travel Technologies

We look for an ancillary ka ancilliary when we look at a sector.

If data is the new oil, what is RateGain?

Major customers are large hotels based out of US, UK.

Space is competitive but advantage is RateGain is the only integrated player.

Furniture consumption has changed:

Teak wood -> carpenter -> passed on to next gen.

Kirloskar Oil Engines

- 77 year old flagship biz of Kirloskar group with strong reputation

1. strategy to grow sales 2x in 3 years

b. Engine - infra theme

3. Value unlocking potential

Trading at discount to peers and historical multiples.

4. Risks and downside

- 160+ year old company

HBL Power Systems Ltd

Current revenue split is Batteries - 64%, Railway & Defence - balance.

- Started as Asian paints division, then spun off

- Huge upcoming capex.

- be agile: beliefs, not identities

- Aggressive, large, mature insurer

In non participating, 100% surplus goes to shareholders.

So every quarter 6k crore + is transferred to shareholders.

Insurance penetration continues to grow.

Gold 42%, copper 33% contribute to the mill lining industry.

Company is Tega Industries. IPO in Dec 2021.

- High promoter holding

This is a bet on a single product.

"history never repeats but often rhymes"

- Pigments space. Pigments are colorants

Fino Payments Bank

- Next growth in banking would come from Bharat.

Company is Data Patterns

- 2.5x order book

- Strong ownership structure