Issue #010 features a leading player in the spends management space. Can Zaggle’s unique business model, growth drivers and global aspirations turn it into a 10-bagger over the next decade?
Really impressed by this analysis on Zaggle and the earlier newsletters on BLS, SAMHI and others. Frankly I didn't find anyone sharing such insights and detailed analysis on the social media like you Shankar sir ji.
On other note, I got allotment of Zaggle shares in its IPO last year and I still hold them. Even I found their business model and segment unique (with my very limited knowledge) and you too confirmed the same.
I am very much impressed with your analysis and simple but clear way of expression. I missed BLS but may be trying out Zaggle since I like new tech applications. Will you be updating developments on your older suggestions in the future or will we be left on our own to add or exit these companies.
Thank you very much, Sanjiv ji. I'm glad you like my work .. it's nice to know many investors are building upon my research and investing their capital. What gets featured in the newsletter are ideas where I have high conviction
With re: your query:
1. I'm working on a monetization format for this newsletter -- a mix of advertising and nominal subscription charge
2. I'm also keen on bringing out a premium subscription which'll include a) important updates to existing stories (via a closed online community), b) monthly discussions (group video calls) and c) a monthly stock list of different strategies like GARP, magic formula, shameless portfolio etc.
It might take me a few months to put this together, sorry about that -- but when it's released, I'm sure it will add a lot more value to my readers.
1. What do you feel is affordable (per month) in the context of the value I provide?
2. And very importantly, I don't want to be the cheapest provider of quality services -- I am ok being the 2nd most affordable provider. So please let me know the cheapest subscription you have come across in this line of work (share link if possible)
I purposefully inserted question 2 to base a context to your answer to question 1. Please try and answer both questions -- actually 3 questions :
1a) Monthly subscription for just the newsletter (atleast 52 issues in an year)
Currently I haven't subscribed to any such content for a price. I'm not as satisfied/ confident as the content that you provide.
These are some of the subscriptions that I have willfully taken and would be comfortable with a similar price range
YouTube - 150/month
Netflix - 150/month
Google Cloud - 150/month
1a) I would get the idea and the concepts from your news letter. I would prefer to go back and do my own home work and go through reports/ screener/ earnings calls/ industry comparison etc..
So I would be willing for a price of 100/month for just the newsletters.
1b) Since this has much more value and would take lesser effort from my side, I would be willing for higher price range
150 to 220/ month
2) These might be some of the creators in the field that I closely follow. They might be a reference
Rahul Jain - 160/ month
Sahil Bhadviya - 160 to 600/month
Labour Law Advisor - 300/month
Akshay Shrivastava - 160/month
Rachna Ranade - 60 to 400/ month
SOIC membership - 1250/ month (I feel it's expensive)
Yadna investment - 1000/ month range (I feel it's expensive)
Thanks for sharing this. I know all these creators (except Mr. Jain), I'll find exact specifics of what they offer & the effort put around it.
Two questions:
1. Let's keep SOIC aside as Ishmohit is better than me & has been pushing me to start this newsletter for sometime now. Anyone else from this list, you feel is most comparable to what I do?
2. As an individual (forget what the others want), what do you expect to achieve from this subscription? Profit of 10k, 1lac, 10lakhs in a year?
The reason I ask this is to gauge if this subscription needs to be restricted to a certain set of readers who can visualize the value. E.g. the avg. smallcase user invests around ₹25,000/mo (₹3 lakhs for the year), so paying ₹5,000 is acceptable for the user as it's like 1.4% (assuming 20% return)
Further, I appreciate you taking the time to compile the list in your message. I'm certain you've noticed -- most of the channels you've listed here are 1M+ subscribers with an average pricing of ₹300/mo and this pricing is for the JOIN button on Youtube. But in the same list, the player with one of the least count of subscribers is SOIC and they charge the highest at ₹15,000/year & yet, they have a large loyal subscriber base because of the value SOIC offers.
My point -- the mechanics of pricing is not based on just cost; there's --
a) value offered (can you turn my newsletter ideas into ₹1 lakh/year or ₹10 lakhs/year?)
b) quality of content (I don't need to say more; effort always shows)
c) unit economics (there are costs involved at the creators end)
d) passion (couldn't find a better word :) but the fact that I'm responding to yours & every comment shows how much I mean this)
.. and many more variables
I'm sure I'll be able to figure this out. The good part is -- being a producer of content & also a consumer of content -- puts me at a better position to think about everyone's interest including mine
Thanks Shantanu ji, this was a good exercise. And things are a lot more clearer to me
1. They do provide some quality content. They seem to go more stock specific. In comparison to your newsletters being stock specific. But I don't believe that they are as versatile/ eye opening as you do. Even with the concepts/ research/ backtracking examples/ valuation exercises. What you teach has been easier to grasp. Also due to the kind of graphics that is displayed on the videos/ newsletters.
2. I think I would fall somewhere in between 10k to 1Lakh.
The example you have provided can fit my case.
Will be able to invest 3 Lakhs per annum (+/- 50k) buffer.
Assuming 20% returns
I would be more comfortable with 1% fees or lesser.
300/ month or lesser.
I think I should work work more on increasing my active income so that I would be more comfortable to give as fees. But that's a different topic.
I agree about the Ishmohit part. He's great.
I try to follow almost all of his videos. But one more point is that they seems to be lengthier and sometimes I don't completely watch them/ watch at 2x/ skip some parts.
That is also an issue with my attention span :)
I get your point on the pricing
a) Since in my case I have lesser capital to invest. Even if I assume I get 52 suggestions in a year, the sum capital invested distributes into a few among the suggestions and I may not be able to know which would provide me the most in returns.
b) no doubts/ questions here
c) this would reduce as the number of subscribers increase.
I have personally suggested your channel to all my family and the friends that I interact with :)
But I agree it is valid that cost is a factor.
d) you're an exceptional content creator that I have come across who responds fully and very promptly to all people.
I have mad respect for the kind of time/ efforts that it takes to do so.
By this exercise I have also been able to get your perspective for deciding the pricing.
But my only concern was point 2a. The kind of profits that I can generate from the kind of distributed investment that I make.
I am also aware that there are people who may be ones with a lot a capital to invest on. (Like the ones who moved BLS international)
They are making out a lot more returns.
I am just thinking it would have been better if the people subscribing would be charged proportionately based on the amounts that they are investing. Like a mutual fund with expense ratio being paid.
But such a structure is not possible I guess.
Thanks for taking out time for reading and replying to my comments.
1. I'm applying for the SEBI RA license next week. This will become important for much of the future initiatives
2. I'll be starting with webinars with the 1st one happening in January. I'll start with mutual funds as I receive 8-10 requests for a 1:1 paid consultation every week and I have to convey my inability to work individually with them
3. I'll start a community from February. I feel there's a need for this with lots of value-adds available for subscribers. For instance -- the stocks I have featured in the newsletter may have important updates every month or quarter and right now, there's now way of conveying this. I can have this here. Similarly there are stocks which are ripe to be bought but because there's no story, I don't include them in the newsletter. I can have it in this platform. Plus there will be discussions online, webinars, physical meetups etc. This will be core of my offering -- a community aiming to learn and discuss and grow together
Shankar Ji, I recently watched your podcast with Abhishek and really enjoyed it. I’d love to see more content like that on your channel — maybe something like discussing your key takeaways from popular books or concepts that even seasoned investors may not know about.
I don’t follow Abhishek, but seeing someone (supposedly an investor and a teacher) with 1M+ followers struggle with basic concepts like EPS or PEG ratio was surprising.
At the end, you mentioned mental models, which is something I used to struggle with when I started investing in 2021. This has changed and I keep averaging up as long as I find valuations reasonable. But I still face some mental challenges.
For example, I’ve been following Zaggle for two months and have invested a decent amount in it. I keep up with their developments — they’ve signed with Mastercard and Blinkit, and the management seems confident. Initially, they projected 45-50% sales growth, then raised it to 50-55%, and now the CEO in an interview with a news channel said 55-60%, with an internal target to exceed even that.
The stock keeps getting more expensive, but I'm still happy with the valuations. The problem is my allocation in the stock is only 2% of my portfolio, but I’d like to increase it to 10-12%. And I feel the urge to make a lumpsum invesment. I fear that if I keep waiting, the stock could reach absurd valuations say 200-300PE as it gets more attention, which I feel is kind of a ticking timebomb. Because in such scenarios, a miss in EPS or guidance can send the stock into a freefall like there's no tomorrow.
Do you face similar dilemmas? If yes, how do you approach this?
Edit: I wanted to say anchoring effect I think (not mental models), but you know what I mean
Thank you Akash ji, I am glad you liked that podcast of Abhishek's channel. I've known Abhishek for over an year now -- he's into technical analysis, hence he might not understand specifics on EPS, PEG ratio etc.
I myself start with a lower amount and as my conviction gets built-up I add more. The same happened with Zaggle .. my first investment was about ₹1 lakh rupees at ₹360/share. Then a few days later, I picked another ₹1 lakh at ₹430/share and again a few days later, it was an additional ₹1 lakh at ₹430/share.
During these breaks, I rely on additional information coming in e.g. some research report or some corporate announcement or news etc. This grows my conviction or diffuses it -- that's how I decide if more of my money needs to go there. Currently, 3.8% of my stock portfolio is in Zaggle.
At the end of the day, I think it comes down to my conviction in the stock. My first investment in Zaggle was 200 shares at 419, followed by 60 more at 409. And now, I’ve been adding in small quantities like 15-20 shares at a time whenever I feel like it (the latest was 20 shares at 504). The management seems confident, and that's the reason I want to invest more so that it can make a significant impact on my overall PF
The reason I'm desperate and don't want to miss the train is that sometimes I regret not buying more when I had the chance.
For example, with Yatharth Hospitals, the company was growing at 30% and trading at a discount to peers despite higher sales growth. The market wasn’t rewarding it because of temporary issues like a drop in EBITDA margins (due to a new hospital acquisition), a rise in receivables, and lower ARPOB growth than peers which was due to a government-heavy payer mix.
But I was confident in the company because the management was confident and they were working on all of the problems mentioned above, so I planned to slowly build a sizable position. And then the stock shot up 40% in a month. Suddenly, the deal wasn’t as attractive anymore — and I kicked myself for not investing more. Like it's still not too expensive, but it was way cheaper!
The same thing happened with Mrs. Bector’s. The company was only growing at 20-22%, but kaafi pit gya tha and inka valuation kaafi neeche aa gya compared to what FMCG stocks like these usually demand. Then, within 1-2 months, the stock surged 70-80%, even though inka input cost bdha jiski wajah se PAT impact hua. And in valuations pe jab 20% growth ka stock 80 PE pe trade kre, toh hum PE expansion expect nahi kr skte.
But thanks so much! I think ye toh mujhe khud hi decide krna hoga ki kaise invest krna hai aur kitna because borrowed conviction never works. Also, I think emotionally bhi ye accept krna hoga ki we can't ride everything from the bottom.
Really loving your work, Shankar Ji! Boht excited rehta newsletter ke liye.
Hello nath sir. Excellent analysis on zaggle business. I watched your podcast as well. I suggest you can add the mental model and applicable framework w.r.t the business you analyse. That will be great learning for all of us. Thank you
Hello Neeraj ji, I'm glad you liked the podcasts and thanks for the suggestion. Unfortunately, the newsletter space is limited to 1,100-1,200 words. To fit everything in this space will be difficult, maybe I can do a separate note on it. Thanks though!
Hello Shankar ji! Excellent analysis as always. I have one doubt, i hope you can clarify that. The cash from operating activites has been in negative for two FYs. I think it is a worrying factor, can you elborate on this? Does this change your analysis in any way?
Thank you! A Saumitra Khanolkar had asked me the same question in the comments. I've posted an answer there, appreciate if you can view it there & make up your inferences.
Shankar Nath ji, loved your analysis......for the past few weeks I was also studying this company and with margin expansion from 9 to 16% plus topline doubling in the next 2 years......this looks like a fairly valued bet at 4-5 price to sales.....your conviction reinforced my thinking....let's hope zaggle becomes as big as we think!
I have only one doubt though.....cash flow from operations are negative since past 2 years...why is the company not generating cash.....couldnt find the reason anywhere...
Hello Saumitra ji, there's a simple theory for it. We already know that Zaggle is a fast growing company (over 50% sales growth) and we also know that most of the spends by companies happen in Q4 -- it might be the case with your company too. Which means, a big chunk of money flows out during Q4 but by the time the accounts are settled, its Q1.
Now the thing with cashflow from operations that you see, it's a number that's reported as of 31st of March. It's like me assuming your income based on what's in your bank account on the 30th of the month and not the 1st of the month. Some companies which are young and growing can be caught on something like this -- but in a few years, when Zaggle would reduce growth and after it has diversified operations to US market (in US, the Q4 is Oct - Dec), I feel this negative CFO point will be taken care of. Anyways, this is one metric one should watch out for
Most welcome 🙌 .. I'm glad you like my work! Yes, the idea is to present an opportunity (after scanning through 50-60 companies every week) and to identify the key drivers. I'll encourage you to do a second level of research in your own time
The stock is up 30% over last 30 days. But it's still looking very promising. I read the concall transcript, and this looks like a great opportunity. I do have one question: hypothetically speaking, would you be comfortable making a big lumpsum investment at these valuations, or would you invest in staggered way?
I don't mind drawdowns, and PE will come down if the company delivers a PAT growth of 50%+ in the coming quarters (assuming the stock doesn't appreciate in price).
I'm just trying to pick your brain. How would you approach this? Would you bet on some correction or be willing to put a substantial amount at these levels?
Thank you, glad you liked it. I would prefer investing progressively .. put some, see what the next quarter results show, if comfortable put some more and so on. That's how I invest .. I've observed I make more money when averaging up. A good example is Himadri Specialty. Started buying at 42 rupees but it did not deter me to buy more at even 420 rupees, today it's at 630 something. Hope this helps!
Fantastic newsletter, Shankar. Have been following your YouTube channel for a while now. All the stocks you've spoken of in the newsletter have already seen a run up (unfortunately for me :-( )
Might need to wait a bit to get a better entry point. Would you agree?
If you do decide to monetise this newsletter, I would definitely be a subscriber. More power to you!
Thank you very much 🙌 .. I'm glad you like my work.
I don't use any technical parameters to decide entry or exit points -- so difficult to predict next moves for the stocks .. sorry! But over time, I've built this practice of not looking so much at the past and focussing just on the future. For example - Himadri Speciality is a stock I bought a couple years back when valuations were favourable. This was at ₹42/share. Then after a few quarters, I found merit in the numbers again (this time seen from a growth lens). The price was no longer in the 40s, it was now ₹420/share. But a 10x it didn't stop me from buying more as the past was no longer relevant at that point. Now that same stock is ₹600/share. The point I want to make is -- kindly measure up your thesis on where the stock might be. If it's likely to double from 10 to 20 .. and if missed the 10 mark & the stock is at 11 -- would you wait for it to drop to 10 or perhaps be contended with a +9 gain per your thesis of 20. That's how you might want to look at it. Hope this helps
Thank you! Yes, I will be monetizing the newsletter starting December. There is now a lot more confidence in my research and I've started investing in a stronger build-out. I now have a researcher, have subscribed to paid tools, am negotiating for a community platform etc. -- would like to continue building this for many years. It's something I'll enjoy
I am student currently pursuing my graduate degree in economics and just gave my CFA L1 examination. I have always been interested in equity markets and your approach of spreading knowledge and analysis is quite easy to understand and helpful in conducting my own analysis. Thankyou sir, also would love to subscribe to the upcoming paid newsletter as soon as possible. Keep up the good work
Thank you very much, Karan ji .. I'm happy you're liking my work & it's helping you build upon your knowledge. Wishing you the best with your studies & forthcoming CFA Level II examinations
Really impressed by this analysis on Zaggle and the earlier newsletters on BLS, SAMHI and others. Frankly I didn't find anyone sharing such insights and detailed analysis on the social media like you Shankar sir ji.
On other note, I got allotment of Zaggle shares in its IPO last year and I still hold them. Even I found their business model and segment unique (with my very limited knowledge) and you too confirmed the same.
Thank you! I'm happy you like my work 🙌 .. appreciate the kind words
I am very much impressed with your analysis and simple but clear way of expression. I missed BLS but may be trying out Zaggle since I like new tech applications. Will you be updating developments on your older suggestions in the future or will we be left on our own to add or exit these companies.
Thank you very much, Sanjiv ji. I'm glad you like my work .. it's nice to know many investors are building upon my research and investing their capital. What gets featured in the newsletter are ideas where I have high conviction
With re: your query:
1. I'm working on a monetization format for this newsletter -- a mix of advertising and nominal subscription charge
2. I'm also keen on bringing out a premium subscription which'll include a) important updates to existing stories (via a closed online community), b) monthly discussions (group video calls) and c) a monthly stock list of different strategies like GARP, magic formula, shameless portfolio etc.
It might take me a few months to put this together, sorry about that -- but when it's released, I'm sure it will add a lot more value to my readers.
I would happily subscribe for the kind of quality that you provide.
A request is to keep the subscription prices affordable.
Thank you very much! 🙌
Just to pick your brains --
1. What do you feel is affordable (per month) in the context of the value I provide?
2. And very importantly, I don't want to be the cheapest provider of quality services -- I am ok being the 2nd most affordable provider. So please let me know the cheapest subscription you have come across in this line of work (share link if possible)
I purposefully inserted question 2 to base a context to your answer to question 1. Please try and answer both questions -- actually 3 questions :
1a) Monthly subscription for just the newsletter (atleast 52 issues in an year)
1b) Monthly subscription for i) newsletter + ii) updates + iii) videocall + iv) strategy stock update
2. Worthy competitor with pricing for benchmarking
Thanks!
Sir. I'll answer from my perspective
Currently I haven't subscribed to any such content for a price. I'm not as satisfied/ confident as the content that you provide.
These are some of the subscriptions that I have willfully taken and would be comfortable with a similar price range
YouTube - 150/month
Netflix - 150/month
Google Cloud - 150/month
1a) I would get the idea and the concepts from your news letter. I would prefer to go back and do my own home work and go through reports/ screener/ earnings calls/ industry comparison etc..
So I would be willing for a price of 100/month for just the newsletters.
1b) Since this has much more value and would take lesser effort from my side, I would be willing for higher price range
150 to 220/ month
2) These might be some of the creators in the field that I closely follow. They might be a reference
Rahul Jain - 160/ month
Sahil Bhadviya - 160 to 600/month
Labour Law Advisor - 300/month
Akshay Shrivastava - 160/month
Rachna Ranade - 60 to 400/ month
SOIC membership - 1250/ month (I feel it's expensive)
Yadna investment - 1000/ month range (I feel it's expensive)
Shashank Udupa - 200/ month
1percentclub Sharan Hedge - 500/ session
Sovrenn - 300/ month
Thanks for sharing this. I know all these creators (except Mr. Jain), I'll find exact specifics of what they offer & the effort put around it.
Two questions:
1. Let's keep SOIC aside as Ishmohit is better than me & has been pushing me to start this newsletter for sometime now. Anyone else from this list, you feel is most comparable to what I do?
2. As an individual (forget what the others want), what do you expect to achieve from this subscription? Profit of 10k, 1lac, 10lakhs in a year?
The reason I ask this is to gauge if this subscription needs to be restricted to a certain set of readers who can visualize the value. E.g. the avg. smallcase user invests around ₹25,000/mo (₹3 lakhs for the year), so paying ₹5,000 is acceptable for the user as it's like 1.4% (assuming 20% return)
Further, I appreciate you taking the time to compile the list in your message. I'm certain you've noticed -- most of the channels you've listed here are 1M+ subscribers with an average pricing of ₹300/mo and this pricing is for the JOIN button on Youtube. But in the same list, the player with one of the least count of subscribers is SOIC and they charge the highest at ₹15,000/year & yet, they have a large loyal subscriber base because of the value SOIC offers.
My point -- the mechanics of pricing is not based on just cost; there's --
a) value offered (can you turn my newsletter ideas into ₹1 lakh/year or ₹10 lakhs/year?)
b) quality of content (I don't need to say more; effort always shows)
c) unit economics (there are costs involved at the creators end)
d) passion (couldn't find a better word :) but the fact that I'm responding to yours & every comment shows how much I mean this)
.. and many more variables
I'm sure I'll be able to figure this out. The good part is -- being a producer of content & also a consumer of content -- puts me at a better position to think about everyone's interest including mine
Thanks Shantanu ji, this was a good exercise. And things are a lot more clearer to me
1. They do provide some quality content. They seem to go more stock specific. In comparison to your newsletters being stock specific. But I don't believe that they are as versatile/ eye opening as you do. Even with the concepts/ research/ backtracking examples/ valuation exercises. What you teach has been easier to grasp. Also due to the kind of graphics that is displayed on the videos/ newsletters.
2. I think I would fall somewhere in between 10k to 1Lakh.
The example you have provided can fit my case.
Will be able to invest 3 Lakhs per annum (+/- 50k) buffer.
Assuming 20% returns
I would be more comfortable with 1% fees or lesser.
300/ month or lesser.
I think I should work work more on increasing my active income so that I would be more comfortable to give as fees. But that's a different topic.
I agree about the Ishmohit part. He's great.
I try to follow almost all of his videos. But one more point is that they seems to be lengthier and sometimes I don't completely watch them/ watch at 2x/ skip some parts.
That is also an issue with my attention span :)
I get your point on the pricing
a) Since in my case I have lesser capital to invest. Even if I assume I get 52 suggestions in a year, the sum capital invested distributes into a few among the suggestions and I may not be able to know which would provide me the most in returns.
b) no doubts/ questions here
c) this would reduce as the number of subscribers increase.
I have personally suggested your channel to all my family and the friends that I interact with :)
But I agree it is valid that cost is a factor.
d) you're an exceptional content creator that I have come across who responds fully and very promptly to all people.
I have mad respect for the kind of time/ efforts that it takes to do so.
By this exercise I have also been able to get your perspective for deciding the pricing.
But my only concern was point 2a. The kind of profits that I can generate from the kind of distributed investment that I make.
I am also aware that there are people who may be ones with a lot a capital to invest on. (Like the ones who moved BLS international)
They are making out a lot more returns.
I am just thinking it would have been better if the people subscribing would be charged proportionately based on the amounts that they are investing. Like a mutual fund with expense ratio being paid.
But such a structure is not possible I guess.
Thanks for taking out time for reading and replying to my comments.
Shankar Ji, this all sounds amazing! I would definitely subscribe as well.
I’d love to know how the development is coming along and if you have any timeline in mind for when the premium subscription might be available.
Thanks! :)
Thank you Akash ji for your support 🙌
It's a bit slow but here's what I have so far --
1. I'm applying for the SEBI RA license next week. This will become important for much of the future initiatives
2. I'll be starting with webinars with the 1st one happening in January. I'll start with mutual funds as I receive 8-10 requests for a 1:1 paid consultation every week and I have to convey my inability to work individually with them
3. I'll start a community from February. I feel there's a need for this with lots of value-adds available for subscribers. For instance -- the stocks I have featured in the newsletter may have important updates every month or quarter and right now, there's now way of conveying this. I can have this here. Similarly there are stocks which are ripe to be bought but because there's no story, I don't include them in the newsletter. I can have it in this platform. Plus there will be discussions online, webinars, physical meetups etc. This will be core of my offering -- a community aiming to learn and discuss and grow together
Hope this gives you a sense
THanks for the update -- really appreciate it! Looking forward to joining the community! :)
Shankar Ji, I recently watched your podcast with Abhishek and really enjoyed it. I’d love to see more content like that on your channel — maybe something like discussing your key takeaways from popular books or concepts that even seasoned investors may not know about.
I don’t follow Abhishek, but seeing someone (supposedly an investor and a teacher) with 1M+ followers struggle with basic concepts like EPS or PEG ratio was surprising.
At the end, you mentioned mental models, which is something I used to struggle with when I started investing in 2021. This has changed and I keep averaging up as long as I find valuations reasonable. But I still face some mental challenges.
For example, I’ve been following Zaggle for two months and have invested a decent amount in it. I keep up with their developments — they’ve signed with Mastercard and Blinkit, and the management seems confident. Initially, they projected 45-50% sales growth, then raised it to 50-55%, and now the CEO in an interview with a news channel said 55-60%, with an internal target to exceed even that.
The stock keeps getting more expensive, but I'm still happy with the valuations. The problem is my allocation in the stock is only 2% of my portfolio, but I’d like to increase it to 10-12%. And I feel the urge to make a lumpsum invesment. I fear that if I keep waiting, the stock could reach absurd valuations say 200-300PE as it gets more attention, which I feel is kind of a ticking timebomb. Because in such scenarios, a miss in EPS or guidance can send the stock into a freefall like there's no tomorrow.
Do you face similar dilemmas? If yes, how do you approach this?
Edit: I wanted to say anchoring effect I think (not mental models), but you know what I mean
Thank you Akash ji, I am glad you liked that podcast of Abhishek's channel. I've known Abhishek for over an year now -- he's into technical analysis, hence he might not understand specifics on EPS, PEG ratio etc.
I myself start with a lower amount and as my conviction gets built-up I add more. The same happened with Zaggle .. my first investment was about ₹1 lakh rupees at ₹360/share. Then a few days later, I picked another ₹1 lakh at ₹430/share and again a few days later, it was an additional ₹1 lakh at ₹430/share.
During these breaks, I rely on additional information coming in e.g. some research report or some corporate announcement or news etc. This grows my conviction or diffuses it -- that's how I decide if more of my money needs to go there. Currently, 3.8% of my stock portfolio is in Zaggle.
Thanks for your helpful response!
At the end of the day, I think it comes down to my conviction in the stock. My first investment in Zaggle was 200 shares at 419, followed by 60 more at 409. And now, I’ve been adding in small quantities like 15-20 shares at a time whenever I feel like it (the latest was 20 shares at 504). The management seems confident, and that's the reason I want to invest more so that it can make a significant impact on my overall PF
The reason I'm desperate and don't want to miss the train is that sometimes I regret not buying more when I had the chance.
For example, with Yatharth Hospitals, the company was growing at 30% and trading at a discount to peers despite higher sales growth. The market wasn’t rewarding it because of temporary issues like a drop in EBITDA margins (due to a new hospital acquisition), a rise in receivables, and lower ARPOB growth than peers which was due to a government-heavy payer mix.
But I was confident in the company because the management was confident and they were working on all of the problems mentioned above, so I planned to slowly build a sizable position. And then the stock shot up 40% in a month. Suddenly, the deal wasn’t as attractive anymore — and I kicked myself for not investing more. Like it's still not too expensive, but it was way cheaper!
The same thing happened with Mrs. Bector’s. The company was only growing at 20-22%, but kaafi pit gya tha and inka valuation kaafi neeche aa gya compared to what FMCG stocks like these usually demand. Then, within 1-2 months, the stock surged 70-80%, even though inka input cost bdha jiski wajah se PAT impact hua. And in valuations pe jab 20% growth ka stock 80 PE pe trade kre, toh hum PE expansion expect nahi kr skte.
But thanks so much! I think ye toh mujhe khud hi decide krna hoga ki kaise invest krna hai aur kitna because borrowed conviction never works. Also, I think emotionally bhi ye accept krna hoga ki we can't ride everything from the bottom.
Really loving your work, Shankar Ji! Boht excited rehta newsletter ke liye.
Hello nath sir. Excellent analysis on zaggle business. I watched your podcast as well. I suggest you can add the mental model and applicable framework w.r.t the business you analyse. That will be great learning for all of us. Thank you
Hello Neeraj ji, I'm glad you liked the podcasts and thanks for the suggestion. Unfortunately, the newsletter space is limited to 1,100-1,200 words. To fit everything in this space will be difficult, maybe I can do a separate note on it. Thanks though!
Hello Shankar ji! Excellent analysis as always. I have one doubt, i hope you can clarify that. The cash from operating activites has been in negative for two FYs. I think it is a worrying factor, can you elborate on this? Does this change your analysis in any way?
Thank you! A Saumitra Khanolkar had asked me the same question in the comments. I've posted an answer there, appreciate if you can view it there & make up your inferences.
Shankar Nath ji, loved your analysis......for the past few weeks I was also studying this company and with margin expansion from 9 to 16% plus topline doubling in the next 2 years......this looks like a fairly valued bet at 4-5 price to sales.....your conviction reinforced my thinking....let's hope zaggle becomes as big as we think!
Thank you! Glad you like my work! 🙌
I have only one doubt though.....cash flow from operations are negative since past 2 years...why is the company not generating cash.....couldnt find the reason anywhere...
Hello Saumitra ji, there's a simple theory for it. We already know that Zaggle is a fast growing company (over 50% sales growth) and we also know that most of the spends by companies happen in Q4 -- it might be the case with your company too. Which means, a big chunk of money flows out during Q4 but by the time the accounts are settled, its Q1.
Now the thing with cashflow from operations that you see, it's a number that's reported as of 31st of March. It's like me assuming your income based on what's in your bank account on the 30th of the month and not the 1st of the month. Some companies which are young and growing can be caught on something like this -- but in a few years, when Zaggle would reduce growth and after it has diversified operations to US market (in US, the Q4 is Oct - Dec), I feel this negative CFO point will be taken care of. Anyways, this is one metric one should watch out for
Thanks for sharing nice analysis. This definitely helps us deep dive in good investment opportunity.
Most welcome 🙌 .. I'm glad you like my work! Yes, the idea is to present an opportunity (after scanning through 50-60 companies every week) and to identify the key drivers. I'll encourage you to do a second level of research in your own time
Great write up Shankar ji!
The stock is up 30% over last 30 days. But it's still looking very promising. I read the concall transcript, and this looks like a great opportunity. I do have one question: hypothetically speaking, would you be comfortable making a big lumpsum investment at these valuations, or would you invest in staggered way?
I don't mind drawdowns, and PE will come down if the company delivers a PAT growth of 50%+ in the coming quarters (assuming the stock doesn't appreciate in price).
I'm just trying to pick your brain. How would you approach this? Would you bet on some correction or be willing to put a substantial amount at these levels?
Thanks so much! :)
Thank you, glad you liked it. I would prefer investing progressively .. put some, see what the next quarter results show, if comfortable put some more and so on. That's how I invest .. I've observed I make more money when averaging up. A good example is Himadri Specialty. Started buying at 42 rupees but it did not deter me to buy more at even 420 rupees, today it's at 630 something. Hope this helps!
Thank you so much -- it cerntainly helps!
Another question: any plans on making stock-specific videos? Or does it not align with the theme of your channel?
Thanks! :)
Great Analysis shankarji, no one shair this type of info 👏 👍 👌.
Keep sharing this kind of articles and educate us with this type of way of thinking 🤔
Thank you. I'm glad you like my work 🙌
Fantastic newsletter, Shankar. Have been following your YouTube channel for a while now. All the stocks you've spoken of in the newsletter have already seen a run up (unfortunately for me :-( )
Might need to wait a bit to get a better entry point. Would you agree?
If you do decide to monetise this newsletter, I would definitely be a subscriber. More power to you!
Thank you very much 🙌 .. I'm glad you like my work.
I don't use any technical parameters to decide entry or exit points -- so difficult to predict next moves for the stocks .. sorry! But over time, I've built this practice of not looking so much at the past and focussing just on the future. For example - Himadri Speciality is a stock I bought a couple years back when valuations were favourable. This was at ₹42/share. Then after a few quarters, I found merit in the numbers again (this time seen from a growth lens). The price was no longer in the 40s, it was now ₹420/share. But a 10x it didn't stop me from buying more as the past was no longer relevant at that point. Now that same stock is ₹600/share. The point I want to make is -- kindly measure up your thesis on where the stock might be. If it's likely to double from 10 to 20 .. and if missed the 10 mark & the stock is at 11 -- would you wait for it to drop to 10 or perhaps be contended with a +9 gain per your thesis of 20. That's how you might want to look at it. Hope this helps
Thank you! Yes, I will be monetizing the newsletter starting December. There is now a lot more confidence in my research and I've started investing in a stronger build-out. I now have a researcher, have subscribed to paid tools, am negotiating for a community platform etc. -- would like to continue building this for many years. It's something I'll enjoy
What a call and analysis for zaggle and bls . Good work as always
Thank you! Even SAMHI did well .. it's up 12% in 28 days (4 weeks) 🤗
What a run up . Fantastic
Thank you! Hope you picked some yourself
Yes I did . Thanks
I am student currently pursuing my graduate degree in economics and just gave my CFA L1 examination. I have always been interested in equity markets and your approach of spreading knowledge and analysis is quite easy to understand and helpful in conducting my own analysis. Thankyou sir, also would love to subscribe to the upcoming paid newsletter as soon as possible. Keep up the good work
Thank you very much, Karan ji .. I'm happy you're liking my work & it's helping you build upon your knowledge. Wishing you the best with your studies & forthcoming CFA Level II examinations
Sir do u have a small case that we can confidently invest in.
I don't have a smallcase presently. I might bring in something next year
Very impressive. Rarely get this kind of analysis in depth anywhere.
Thank you! 🙌
Incredible analysis and view points Shankar. Really appreciate the depth of analysis :)
Thank you.
Thank you! 🙌