If you have not read the previous post - I would urge you to read before diving in this post

TLDR

Gas Turbine

The primary components to produce electricity using gas turbines are

i) Fuel (typically natural gas)

ii) The gas turbine itself (available across different MW ranges - the fuel is burned effectively)

iii) Generator to produce electricity

To increase efficiency (in combined cycle turbines), additional industrial equipment to recover heat (exhaust head), which is fed to a steam turbine to generate electricity

Three companies now control over 75% of the world's gas turbine supply. It took thirty years of booms, busts, and bailouts to get here!!

In the 1990s, the large industrial gas turbine market was genuinely competitive. GE, Westinghouse, Siemens, ABB, Alstom, Mitsubishi, Rolls-Royce, and Ansaldo all operated at scale. Customers had options. Competition kept margins honest.

What followed was not a technology race - it was a capital cycle playing out in slow motion, as described in Capital Returns. The ordering boom of the early 2000s collapsed into a bust, stranding manufacturing capacity and crushing margins across the industry.

In the aftermath came the consolidation. Siemens acquired Westinghouse’s power division. ABB and Alstom combined their power businesses (the inherited turbines carried severe design defects - warranty claims and repairs pushed it to the edge of insolvency, triggering a rescue by the French government). GE ultimately acquired Alstom’s power assets. Rolls-Royce exited large-frame turbines entirely, retreating to its core jet engine business.

After going through the bust, the Industry is now absorbing more orders than it can physically fulfill. The waiting list runs to 2031.

The scarce resource is no longer capital, or even technology - it is manufacturing slots, held exclusively by three companies that spent thirty years accumulating the institutional knowledge no acquirer could buy and no newcomer can replicate fast enough to matter.

Azad Engineering

The most supply-constrained components in gas turbines are turbine blades and vanes.

Gas Turbine OEMs do not manufacture every component inside their turbines. The components demand materials and tolerances so extreme that OEMs source these parts from a small, specialised external supply base.

One such company is Azad Engineering. All three top Gas Turbine OEMs (75% of Global Market Share - GE, Siemens, MHI) source components from Azad.

Growth Business

Azad is putting up dedicated mini-plants in the factory premises for different customers. At the time of IPO they had area of 20,000 sqm. They acquired another 170,000 sqm of which in the phase I target is to develop 95,000 sqm by putting dedicated plants for the customers.

Management says wallet share across customers is only about 1–1.5%, leaving substantial scope for long-term growth.

The orderbook at the end of Q3FY2026 was INR 6500 Crore i.e. over 11x TTM revenue giving growth visibility.

The growth is already visible in the numbers

Why Azad is building dedicated factories rather that having a single facility?

In my opinion, this is essentially OEM capacity reservation in disguise.

1. Customers are pre-blocking capacity, not just ordering parts. Further, IP is key - having dedicated factories give each OEM hard assurance on IP segregation, no tooling cross-contamination, no shared shop-floor visibility into a rival’s parts.

2. Qualification is per-line, not per-company. These qualifications are tied to specific machines, fixtures and processes. Dedicated plant simplifies audits, traceability and AS9100/nuclear/turbine-grade certification.

Right to Win

Manufacturing in India is cost competitive compared to the major markets like China, Europe, America and Korea.

Moving up the Value Chain

Broadly, we can differentiate parts on (1) on the basis of section of the turbine i.e. cold section (compression) vs hot section (combustion) (2) Stationary parts vs rotating parts

The above infographic showcases that Azad has moved up the value chain but it is still not at the pinnacle of handling the toughest job i.e. rotating parts in the combustion section.

What it takes to move up the value chain?

1. Advanced Material Processing and Casting

• Manufacturing process require nickel-based superalloys - special materials engineered to sustain structural integrity under creep and stress at temperatures that would destroy conventional steel.

• Working with these i.e. forging or casting these materials is not a standard foundry operation rather a controlled process at every stage.

• The most demanding application is directional solidification and single crystal casting, where the blade is grown as a continuous crystalline structure to eliminate the grain boundaries that would otherwise initiate creep failure at operating temperature.

  Azad is not into single crystal blade manufacturing. PTCIL is advancing into this capability

2. High-Precision Machining and Drilling

• One of the core capability of Azad

• 3D machining of components using five-axis and nine-axis CNC operations

3. Surface Treatment and Coating Systems

• Special coatings are required especially the Thermal Barrier Coatings

• NADCAP Certification required

Apart from this the manufacturing requires Advanced Inspection and Testing.

Emerging technologies in the field include Additive Manufacturing and use of ceramic matrix composites (CMCs) for blades as they are lighter and more heat tolerant.

Azad's core competency was in cold-section compressor airfoils. The MHI contract represents a significant shift into hot-section manufacturing

Nozzle vanes face extreme heat but without the centrifugal fatigue loading of rotating parts. They are a hot section component but not the most demanding hot section component.

AZAD VTC

Azad acquired VTC Surface Technologies in May 2024 bringing advanced wear, corrosion, and heat-resistant coating capabilities in-house. As discussed earlier, surface coatings is a critical process, previously Azad was dependent on approved third-party coaters, leaking margin and exposing its OEM qualified-supplier status to an external vendor's quality system.

By internalising this step and subsequently securing NADCAP accreditation, Azad can now do coating in-house.

AZAD PRIME

Azad Prime (formerly Leo Primecomp), brought in four decades of heavy engineering expertise i.e. precision-machined components ranging from 1 gram to 120 tons and 3mm to 3000mm in diameter, including control valves, rotors, casings, diaphragms, and heavy engineering systems used in nuclear, gas, and thermal turbine engines.

GTRE

GTRE win for end-to-end manufacturing, assembly, and integration of a complete assembled Advanced Turbo Gas Generator Engine. Here, Azad is sole industry production partner.

This showcased the hunger to move to systems integration. The order is yet to be fulfilled but it would lead to valuable process knowledge, tooling, and qualification for a complete propulsion system

Aerospace and Oil & Gas Vertical

We have so far not discussed the other two verticals i.e. Aerospace and Oil & Gas. Here again Azad is working with the top OEMs. Essentially every major engine OEM is their customer in Aerospace and as far as Oil & Gas is concerned

Azad’s aerospace business today is a small but rapidly accelerating share of total revenue, currently around 17-19% delivering mission and life-critical components including engine assemblies, APUs, airfoils, actuators, and hydraulic systems, supporting platforms such as the Boeing 737, Airbus A320 and A350 families, and the Gulfstream G550.

The fundamental challenge in aerospace is not just capability but time as qualification cycles for aerospace components are among the longest and most capital-intensive in any industry. A new part qualification can take 2-5 years of FAIs (First Article Inspections), process approvals, audit cycles and test programmes before a single revenue-generating part ships.

Oil & Gas is Azad’s newest and smallest vertical but one with a clear strategic rationale which is precision turbomachinery components for the LNG, upstream, and midstream segments. This is technically adjacent to what Azad already makes for power generation turbines.

O&G is different from aerospace. It is less about qualification time and more about contract structure and customer concentration. The segment currently contributes a modest share of revenue, and the primary customer anchor is Baker Hughes via its Italian subsidiary Nuovo Pignone, one of the world’s foremost turbomachinery OEMs for LNG and petrochemical applications.

Dependence on a single large O&G customer, while typical in the early stage of a vertical build, means revenue is lumpy and visibility is shorter than the energy segment’s long-duration turbine contracts. However, Baker Hughes is not a transactional customer. Azad has signed multiple amendments to its Strategic Supply Agreement with Nuovo Pignone, most recently in April 2026. A dedicated 7,600 sqm advanced lean manufacturing facility dedicated to Baker Hughes, has been inaugurated.

Risk

Working Capital

The working capital is elevated. Need to have large inventories to get qualified (especially in aerospace as it is relatively newer vertical)

One mitigation strategy is if local capabilities get developed - already working to onboard local suppliers. However, most of it depends on the OEMs with very little say by Azad. Sunflag and Star wire has been approved as suppliers for a few grades.

To sum up

Disc: Invested and Biased. Do your own Due Diligence. This is not an investment advice

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"The biggest issue we are now having is not a compute glut, but it's power and the ability to get the data centre builds done fast enough close to power."

Satya Nadella, CEO, Microsoft

Dear Learners,

When the CEO of the world’s most valuable company says his biggest problem is electricity — not chips, not software, not regulation — it is worth pausing and asking: what exactly is happening? And more importantly, who profits from solving it?

Today’s post is about Behind the Meter (BTM) power — a structural shift in how the world’s largest data centers are being powered.

During a gold rush, sell shovels!!

The unsatiable Power Demand

US data centers consumed 176 TWh of electricity in 2023. By 2028, that figure is projected to reach 325–580 TWh — roughly 6–12% of the entire US electricity supply. Installed data center capacity sits at ~80 GW today and is expected to reach 150 GW by 2028.

Data Center accounts for 40-50% of electricity demand growth in United States - putting tremendous pressure on the hyperscalers to power their datacenters.

Every major hyperscaler is building at maximum speed. Microsoft, Google, Amazon, Meta, and Oracle collectively pledged over $400 billion in AI infrastructure capex in 2025. New data center campuses are being announced in Northern Virginia, Texas, Ohio, Illinois — anywhere with land, labour, and fibre.

The Jevons Paradox: More efficient AI will spur demand for more AI

Falling unit prices, enabled by greater scale and efficiency, can spur even higher consumption. By 2030, training a frontier model could require 10^29 FLOPS and 4 – 16 GW of power

Computational intensity is outpacing efficiency improvements…period

The US grid cannot keep pace with data center demand

We have written about transmission in the past as well. Integrating intermittent renewables puts immense pressure on the grid, and the demand from data centers is taking grid vulnerabilities to another level:

In the year 2000, connecting a new power consumer to the US grid took roughly 22 months fast forward 2026, the median interconnection wait time has stretched to 54 months. In Northern Virginia — "Data Center Alley," home to more data center capacity than anywhere else on Earth — wait times for connections above 90MW have increased to 4 - 7 years.

Large data center load additions have a significant impact on other customers as well. It results in higher transmission costs, higher energy market prices, and higher capacity market prices.

Going Behind the Meter

56 GW of Behind the Meter (BTM) power projects — generating electricity on-site — were announced in 2025 alone. Oracle signed a 2.8 GW SOFC deal with Bloom Energy. Microsoft signed a 1.4 GW off-grid gas deal.

Powering Behind the Meter

Two technologies are competing for the BTM data center power market and they couldn’t be more different in their approach, their economics, and their timelines.

1. Gas Turbines: Mature, proven, manufacturable at scale. GE Vernova’s LM2500XPRESS aeroderivative turbine produces 35 MW per unit, can be deployed in as little as two weeks (95% factory-assembled), and sits on a supply chain that has served aviation and power for 50 years.

2. Solid Oxide Fuel Cells (SOFC): Electrochemical rather than combustion. Bloom Energy’s fuel cell servers convert natural gas to electricity without burning it — at 54–60% electrical efficiency, versus 35–42% for a simple-cycle gas turbine. Modular, silent, near-zero criteria pollutants. Deployable in 90 days.

The question for investors and the honest question for anyone tracking this space — is: which technology wins the BTM market, and what does that mean for the companies supplying them?

Gas Turbines

The global turbine market is currently dominated by a trio of major players—GE Vernova, Siemens Energy, and Mitsubishi. Each command a 20% to 25% market share. All three are aggressively scaling their operations to meet rising demand.

• Mitsubishi intends to double its manufacturing capacity over the next two years.

• GE Vernova is planning a phased expansion. Expect to increase annual output from 16 GW (2023/2024 levels) to 22 GW by the end of 2026, eventually reaching 26 GW by mid-2028.

• Siemens Energy, focusing on the American market, is injecting $1 billion into US-based facilities, to boost its large turbine production by roughly 20%.

read more:

Frontier | Winston

Three companies make 75% of the world’s large gas turbines

Gas turbines generate roughly a fifth of the world’s electricity. The world class models do it at over 64% combined-cycle efficiency, which means nearly two-thirds of the fuel’s energy reaches the grid, while an older plant manages about 33…

Read more

a month ago · 25 likes · 10 comments · Frontier | Winston

Solid Oxide Fuel Cells (SOFC)

Bloom Energy’s solid oxide fuel cell uses natural gas to produce electric power and competes with open-cycle small gas turbines and gas engines.

SOFCs do not burn natural gas to produce energy. It is an electromechanical process where fuel cells induce gas and air to interact with specialized solid ceramic materials at high temperatures, and a series of chemical processes converts the gas into CO₂ and electricity.

Sources:

1. Fighting Worlds - JPM 16th Annual Energy Paper

2. Building the Backbone of AI - Brookfield

3. How AI Labs Are Solving the Power Crisis: The Onsite Gas Deep Dive

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• Missiles are being replaced by Loitering Munitions

• Fighter aircraft are making way for unmanned combat drones

• Tanks and heavy infantry vehicles are being replaced by more nimble unmanned ground vehicles with autonomous weaponry

These changes are forcing strategists to reboot the offensive and defensive strategies. Especially in Aerial conflicts, the UAV technology is growing leaps and bounds, the defensive side is slow to catch up, creating lots of asymmetric outcomes - If you have to shoot a $30K drone with a million dollar missile, do the math, it’s game over!!

Recent conflicts, such as the Russian-Ukrainian Conflict, Operation Sindoor, and the ongoing conflict in the Middle East, have shown the need for well-established Air Defence (AD) Systems.

Opportunity lies in the solution of this asymmetry!

When the offensive is led by low-cost UAVs and loitering munitions that can neutralize multi-million dollar assets and can saturate air defences, the solution also needs to be a low-cost alternative, especially with less incremental costs to defend. The current AD systems are prone to economic attrition as stockpiles deplete faster than can be replenished by industrial bases.

The traditional kinetic doctrine—relying on physical projectiles—faces three Challenges:

1. Limited Magazine: You can only carry so many missiles.

2. Logistical Tail: Transporting heavy ammunition is slow and vulnerable.

3. Collateral Risk: What goes up must come down, often with explosive consequences in urban areas.

One of the solutions to this asymmetry is Directed Energy Weapons (DEWs):

1. Near-Zero Cost-per-Shot: Firing a laser for several seconds costs roughly the price of a few liters of fuel.

2. Infinite Magazine: As long as there is power (via a generator or battery), the weapon can keep firing.

3. Surgical Precision: They can disable a drone’s camera or melt its motor without destroying the entire surrounding area.

Note: The technology is still in developmental stages. Most deployed or near‑deployed systems are still in the low-medium power range and aimed at small, vulnerable targets. 

Directed Energy Weapons (DEWs) - The Great Leveler

DEWs use concentrated beams of light or radio waves to damage or disable a target.

At its core, a directed energy weapon swaps out explosive material for electricity.

Broadly, there are two types:

(1) High-Energy Lasers (HEL) and (2) High-Power Microwaves (HPM)

They deliver speed-of-light engagement, near-zero per-shot cost, and effectively unlimited magazines. Adoption is accelerating as drone swarms, missile salvos, and hypersonic threats strain traditional interceptors.

High Power Microwave (HPM) systems provide a non-kinetic alternative by projecting directed electromagnetic energy to disrupt or disable drone electronics at tactically useful ranges. HPM offers scalable effects—from temporary disruption to permanent damage enables simultaneous engagement of multiple targets, and delivers a very low cost-per-engagement compared with missiles or guns. These attributes reduce logistics burdens and allow sustained defensive operations against massed autonomous threats.

Indian Context

For India, the directed energy weapon space is still early but no longer theoretical. There is a growing government interest, especially for air defence, anti‑drone and border security roles.

Directed Energy Weapons will be integral in the Akashteer AD system especially against the swarm of drones/vectors that can saturate the AD.

1) Sahastra Shakti

Following the successful trials of the Mk-II(A) Sahastra Shakti 30kW laser system in April 2025, India has joined an exclusive club of nations (US, Russia, China, Israel) with operational DEW capabilities.

2) Tonbo Imaging - Wavestrike

High-Power Microwave (HPM) system designed to neutralize drone swarms and disrupt electronic infrastructure - Multi-Beam Klystron (MBK) technology.

Compact footprint for versatile deployment across land, naval, and airborne platforms.

3) Apollo Microsystems

Received Technology from DRDO for 10 KW DEW

To Conclude

This is a fast-growing and much-needed segment in Air Defense.

On the one hand, the physics is proven, key components exist, and early systems are being tested. However, the development challenges still exist to put these systems at scale.

There is a visible technology curve, a clear problem to solve (cheap drones, missile saturation, munitions costs), but a deployment path that will likely be lumpy and programme‑driven rather than smooth.

There will be opportunities, especially in the underlying picks‑and‑shovels – optics, power electronics, sensors, integration – when these DEWs will be deployed at scale.

Till then, let’s track this evolving space!

Invest in yourself…. be a learning machine.

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Numbers and Narratives

Let me start by introducing a wonderful book by valuation guru Prof. Aswath Damodaran (well, who am I to introduce him!) - Numbers and Narratives

There are two camps - the number crunchers and the storytellers. However, the real magic happens when these two worlds are bridged - when the story and numbers align.

Coming to Dynamatic Technologies, it is an engineering company operating in Aerospace, Hydraulic, and Metallurgy segments.

We have covered it extensively in the previous post (Dec 2024), where we explored Dynamatic through the lens of the 4-Cylinder Model (4 levers of profitability)

The core thesis in December 2024 was

1. Growth in the Aerospace Segment & Hydraulics

2. Margin increase and operating leverage

The key question is - does this thesis still hold?

Growth in Aerospace

The Aerospace segment has grown consistently since Q1 FY 25. The share of Aerospace has increased from 40% to 50%.

So even though we have not witnessed hyper growth, directionally, Aerospace contribution is increasing meaningfully.

At an inflection point

Why do I believe that the company is at an inflection point?

Capabilities are a store of value. But value itself can become a value trap unless the value is unlocked. Value will be unlocked when the capability is translated into cash flows.

The J-Curve mental model is explained succinctly by SOIC, and it can very well be applied to Dynamatic Tech. In a nutshell, the model can be explained by the quote:

This is the nature of compounding. Coming back to the why, Dynamatic might be at an inflection point. Let’s dig into some of the opportunities:

(1) A220 doors

The company has supplied the first shipset ahead of time

Each shipset is USD 0.5 million (~4.5 cr), As per AGM, they target 2 shipsets per month, making it a 10 Million Dollar revenue per year i.e. 90 cr from this program. In 3 years it will go to 10 shipsets per month i.e. a 50 million dollar revenue stream ~450 cr revenue (FY 25 total revenue from Aerospace was 600 cr).

(2) Rear fuselage of Dassault Falcon 6X

Going up the value chain - from sections of fuselage to fuel tank to the complete rear fuselage.

Around 50 Falcon 6X are going to be produced annually. While the order value is not disclosed, Falcon 6X is a USD 50 million dollar product. Airframe, fuselage etc, generally accounts for 25-30% of the cost i.e. 12.5-15 million dollar and the rear fuselage could be anywhere between 1-2.5 million dollars/fuselage. Again, this is a 50 million dollar opportunity annually.

The above are the secured contracts. There are a few more optionalities that can play out:

(1) Dynauton

Dynauton focuses on the design and manufacture of advanced Unmanned Aerial Systems and critical subsystems such as gimbals, autopilots, radars, propulsion units, avionics, and integrated software solutions.

Focus on IP / tech stack. 

Patang is a tethered drone and a RFI has already been issued

(2) Advanced Medium Combat Aircraft (AMCA)

The Advanced Medium Combat Aircraft (AMCA) is India’s ambitious program to develop an indigenous fifth-generation stealth multirole fighter. ADA has planned to develop 5 prototypes of AMCA for flight testing at an estimated cost of Rs 15,000 crore

The private sector is at the forefront of this project. Dynamatic is part of the L&T + BEL + Dynamatic consortium. It is reportedly one of the front-runners for this project.

(3) Artillery Shells

The German foundry of DTL has the capability of producing extremely complicated castings in the most complex materials. The company intends to move its metallurgical business to Aerospace and Defence. They have a good potential for Artillary shells

(4) Growing Aerospace Manufacturing Ecosystem in India

There is renewed focus on this sector. India can capture some of the Assembly lines, e.g., the Embraer Assembly line (Adani Embraer MoU), SJ-100 production in India (HAL and Russia’s United Aircraft Corporation), or Rafale Assembly in India, etc.

Right to win

Not just a manufacturer but a design partner

Evolving from a traditional “build-to-print” manufacturer into a Tier-1 design and assembly partner. A prime example of their design capability is the A320 Flap Track Beam. DTL took a 40-year-old design and completely re-engineered it into a monolithic structure, reducing the total part count from 200 to just 20. This transformation is backed by its three dedicated R&D centers staffed by 90 scientists and 650 engineers.

Applying hydraulics know-how to move up in Aerospace

The Airbus A220 door win is actually a testament to this.

Global Operations

Defence and Aerospace are strategic sectors. The company has deliberately kept global operations so as to leverage global presence for cheaper cost of capital and a way in global defence supply chain.

Risks

I’ve covered this here. In Aerospace, there are no small parts, a whole movie (flight) showcased how one screw can screw the aircraft. The industry itself is a duopoly. Its a tightly regulated industry.

***

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Happy New Year 2026!.🎉😀

Wish you a Happy New Year and a great start to 2026. Financially, too!!

Most people treat New Year as a "reset" button. But as students of the market and of life, we know that real progress doesn't come from resets—it comes from compounding. Just as a great business reinvests its earnings to grow, we must reinvest our time, capital, and curiosity into ourselves.

Systems over Resolutions

"Goals are about the results you want to achieve. Systems are about the processes that lead to those results." — Atomic Habits, James Clear

As we step into 2026, I want to challenge the readers to stop "resolving" and start "designing." In the words of James Clear, "You do not rise to the level of your goals. You fall to the level of your systems."

Stop making resolutions that break by February. Instead, build systems that compound.

Some systems that I find useful:

1. Undistracted Learning: Every morning, before you check your whatsapp, email or the markets, read 20 mins. Treat this as a non-negotiable appointment with your future self.

2. Learning Tax: Spend guilt-free if you are spending it for personal growth. This isn't an "expense"—it’s your R&D expense.

   Arrange a small, automatic monthly transfer (even if it's just the price of two coffees) into a separate "Knowledge Fund." Use this money—guilt-free—exclusively for books, premium newsletters, workshops, or software tools that make you better at what you do.

3. Read Voraciously: A library isn't a trophy case; it’s a laboratory. To truly grow, we need to shift our focus toward the Anti-Library. Read as wide as possible - Skim, scan, and sample books on topics you know nothing about, helps in building your "lateral thinking" and allows you to connect dots.

   The concept of Anti-Library is quite popular from Nassim Taleb’s Works - a constant, humble reminder of everything you have yet to discover.

   Read some books deeply, 2 or 3 core topics that define your career or passion. For these, don't just read; study. Most of the books in the following list are always handy for a re-read.

4. Organise for Action: I have found the PARA method, borrowed from Tiago Forte’s works, very effective in maintaining digital declutter. Basically organise the notes and documents in order of actionability.

   Projects: Short-term efforts with a deadline

   Areas: Ongoing responsibilities that require a standard over time

   Resources: Topics of ongoing interest

   Archives: Everything else that is no longer active.

5. "Social Proof" Circuit Breaker: A major threat to our financial goals is spending triggered by "Lifestyle Creep" driven by social proof. If you are tempted to buy something over a predetermined threshold just sit on it a day or two to avoid impulsive purchases.

The Philosophy of Wealth: Naval’s Triad

Of all the frameworks I’ve explored on this journey of lifelong learning, a key learning that has stuck with me is the triad from The Almanack of Naval Ravikant.

Wealth creation is framed as a derivative of three core pillars: Compounding, Leverage, and Judgement.

All real wealth comes from Compounding—not just in your bank account, but in your relationships and your reputation. To accelerate this, apply Leverage: using code, media, or capital to work while you sleep. However, because leverage is a force multiplier for your decisions, Judgement becomes your most valuable skill. In an age of infinite leverage, one right decision can lead to outsized returns, making your ability to see the truth more valuable than mere hard work.

The goal isn't to reach a finish line, but to build a machine that keeps running. Shift focus from fragile resolutions to robust systems.

Move away from the anxiety of "trying harder" and toward the quiet confidence of "building better." The compounding of these small, systemic shifts is what eventually creates the "overnight success" everyone else will wonder about years from now. Let’s stop chasing goals and start designing a life that makes growth inevitable!!

Happy New Year!!

Thank You for all the support!!

Wishing everyone a wonderful 2026 ahead…filled with joy and prosperity :)

Invest in yourself…. be a learning machine.

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Disclaimer: Views are personal. I am not SEBI registered. The information provided here is for educational purposes only. This is not buy or sell advice. I will not be responsible for any of your profit/loss based on the above information. Consult your financial advisor before making any decisions.

Today’s post explores the impact of changing consumer habits, rising disposable income, and the trend of premiumization in the Alcohol Industry. We will also discuss more about the fundamentals of Radico Khaitan (Known for Magic Moments Vodka and Rampur Whisky).

The post has been inspired by a webinar by Team SOIC on the premiumisation theme in India’s consumption boom. I’ve personally learned a lot from the free and paid resources by SOIC/ . If you are looking to start your journey, from my personal experience, this is a great value-add.

Join SOIC Membership

“After per capita income rises above $4,000, countries typically industrialise and urbanise, creating a strong, and sometimes disproportionate, relationship between further economic growth and extra commodity demand”

— Javier Blas, The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources

So, India’s per capita income is around $2900. In terms of GDP, which is around 4 trillion dollars.

Although we have not reached a typical inflection point, we can’t compare India vis-à-vis other economies, given (1) India is a consumption-driven economy and (2) given the large population base, the averages/per capita statistics doesn’t show the true picture.

Over 55% of consumption is retail consumption. The question is how this will expand. In my opinion, there will be increased penetration of new products, i.e., today’s luxuries will be tomorrow’s necessities, and second, premiumisation of consumption.

The premiumisation is already underway - this is evident in SUV sales, Air travel overtaking railways, and D2C brands providing niche consumption avenues.

Blume Research gives an interesting analogy of comparing different cohorts of consumption classes with different economies. The Consuming Class and Aspirant Class is the one which very well can absorb new class of products and very much receptive towards premiumisation.

The next trillion dollar in Indian economy will be be added at a faster pace...sheer compounding. The question is how will this impact consumption - (1) democratisation of nascent categories and (2) Premiumisation

Radico Khaitan

Among India’s leading IMFL (Indian Made Foreign Liquor) companies.

Originally known as Rampur Distillery Company, it began by distilling and bottling for branded liquor firms and armed forces canteens.

Known for brands like Magic Moments in Vodka, 8 PM Whisky, Rampur Single Malts, Jaiselmer Gin, Royal Ranthambore Whisky, and Sangam World Malt, etc.

This is not a recommendation. Please do check if it fits your framework before investing. 

Thesis Pointer No. 1 - Premiumisation

The Indian AlcoBev industry is undergoing a structural shift from traditional consumption patterns to a more lifestyle-driven category. With rising affluence, evolving preference, and increasing demand for elevated experiences, we see substantial long-term opportunity in the premium and luxury segments.

Company is walking the talk on premiumisation as well. Evident from the increasing share of premium and above brands in volume terms (and offcourse in value terms as well). Also, series of launches suggest the same.

Thesis Pointer No. 2 - Backward Integration

Backward integration for quality control and margin expansion

1. Backward integration is crucial for long-term ENA supplies as ethanol blending policy is expected to constrain molasses availability and increase the demand for grain-based ENA.

2. Radico's in-house ENA already commands a 7% to 10% premium over other manufacturers due to its quality.

3. State Governments e.g. UP State Excise Policy, mandates grain alcohol in the 42.8% category (representing 25% of the overall country liquor industry), is a significant development. Radico's dual-feed conversion and new grain plant allow it to produce for this segment, improving profitability.

4. Radico Khaitan expects significant margin improvements from its backward integration initiatives, alongside its premiumization strategy and price increases.

Direct Cost Savings from ENA Production: Manufacturing ENA in-house versus buying from external sources provides a cost delta ranging from ₹10 to ₹17 per liter. This backward integration from the Rampur Dual Feed plant is expected to yield a 150 to 200 basis points gross margin improvement.

Thesis Pointer No. 3- Margin Expansion

Management has consistently guided for a continuous improvement in EBITDA margins, expecting an expansion of 100 to 125 basis points year-on-year for the next three years (from FY25).

• This trajectory is projected to lead to mid-teens margins by the end of FY2024 and late-teens margins in two to three years (by FY2026 or FY2027). The company has an aspiration to reach "20% easily" in five years.

• The improvement is attributed to a combination of factors: backward integration benefits, product premiumization, and price increases.

• Reduced working capital:

"The best thing that has happened in UP with the new excise policy is that you have got composite shops, which have come up which have expanded the universe of outlets by almost 40%. Another big advantage that has accrued to the industry is that in IMFL, the wholesalers are now paying the excise duty, which means that the industry is lowering its working capital requirement, which is a big plus. This also means that any established player like Radico will reap huge benefits because the traction for fast-moving brands will be much more, because wholesaler would like to take cash and rotate it faster. So, that's a very big plus which has happened."

Thesis Pointer No. 4- UK FTA Advantage:

Radico, for its brands (except single malt), imports Scotch from the UK.

The FTA cuts very high Indian import tariffs on UK whisky/gin (from ~150% → 75% immediately, with further phased reductions to ~40% over ~10 years)

With the reduction in tariffs, they expect significant cost advantages:

“ We have estimated our Scotch requirements valued at over Rs. 250 crores in FY26 and we expect significant cost advantages from this development. In three years, we expect the import of scotch of Radico to cross Rs. 400 crores.”

-Q1FY2026 Concall

I may be wrong, they were expected to import 100 cr scotch + 150 cr duty i.e. 250 cr. The tarrif will be reduces to 75 cr. i.e. 75 cr addition to PBT. 

Let me invert - will not the duty decrease lead to increase in competitiveness of Scottish brands in India?

Customs-duty savings are real but will only translate into small-to-moderate retail price drops (industry expects roughly ~10% fall in retail price for imported whisky) because India’s state excise/VAT and retail margins are the dominant cost components.

The deal unlocks sizeable untapped demand (premiumisation + low import penetration) so UK brands will increase competitive intensity — but non-tariff barriers (state excise regime, licensing, labelling/FSSAI, distribution access, advertising limits, minimum price floors) remain significant gatekeepers.

On top of that - this business is about building brands with recall. Consumer preferences matter a lot!!

Personal Anecdote - Amazed by Radico’s reach

I recently met CEO of a Japanese Company, and in our interaction he mentioned how he was introduced to Rampur and now always look forward to someone coming from India to bring Rampur Whisky for him.

I was surprised not just because this kind of feedback was from Japan but the fact that this was not in Tokyo or Osaka, but rather a smaller city of Japan. 😲

Love the way they have created some fantastic global brands.

This is intial read on the company. Other companies to look in the same sector are Tilaknagar (entry in Whisky Sector), Associated Alcohol, Som Distillaries, Allied Blenders and Piccadily Agro (Indri).

Across the companies, premiumisation drive seems to have taken centerstage.

Risks

• Political Risk - Gujarat is a dry state. Bihar also became a dry state. There is always a risk in this industry in this regard. However, on the contrary, with the GST, there are few direct sources of revenue for states, and excise on alcohol is a key revenue item for states’ finances.

• Changing consumer preferences - There is increasingly awareness about side effects of alcohol on health. The growth of GLP may also play a role in reducing consumption of alcohol.

*****

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Laurus Labs

The story of the Elephant and the Blind Men related perfectly to the business of Laurus Labs. Some say it is an ARV Company, some perceive it as an API company, and others may call it a CDMO Player.

My take on Laurus Labs is that it is a research-focused company that is trying to move up the value chain, driven by growth-hungry promoters. From being a dominant player in ARVs (in layman's terms, drugs for HIV patients), they have diversified and grown other verticals like Formulations and CDMO. Now, building a Biologics Business as well.

This is an indication of where the business is pivoting. CDMO as a % of total revenue is increasing while the contribution of Generic Business is decreasing. They manufacture both API and formulations for ARV, which is a saturated market. This also points out that CDMO is growing at a much faster pace.

Apart from the impressive growth (remember CDMO is a lumpy business), the key highlight is the pipeline and investments in capabilities like flow chemistry, biocatalysts etc. 

Bio Division was muted this quarter due to specific issues but look to grow here as well

The key growth driver is CDMO 

R&D Focus

Given their aggressive nature, they have at times overstepped the investment pedal, leading to a fall in asset utilization, which leads to the cyclical nature of their growth.

I distinctly remember a case study during my MBA days, Ford vs Toyota. Ford’s growth came in step functions, while Toyota worked on continuous improvement and gradual expansion.

IMO, Laurus is a company that believes in step functions. Deploying large capex, which in the short term reduces the utilization, effectively reducing margins. When the ramp-up happens, i.e., capacity utilization starts improving, there is a big jump in margins.

The Capex is still Continuing but majorly focusing in Ramp-up

Q1FY2026 Results

Strong growth YoY. Can't compare QoQ as June Quarter is generally weaker than Mar Quarter

Risks

1. CDMO is a lumpy business - given the size of investment in the past - the capacity utilisation recovery might not be linear

2. Capacity Expansion - Still investing a lot in Capex. But most of the capex is towards ramp up

3. Laurus Bio may take longer to gain traction. A lot of gestation period and further investments may be required

4. So far excellent regulatory approval track record…but in pharma industry this is always a risk (e.g. Divis in 2017)

To sum up the key interpretation for the results is that Laurus Labs is transforming as a business from an API company to a CDMO + biotech company and hence moving into high margin R&D‑driven segment.

They have invested a lot in the past two years in terms of their capacity. Time has come that operational leverage will come into play as capacity utilization picks up and asset turns improve.

FY 2026 End updates

We overestimate what could be done in an year and underestimate what can be done in a decade

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The way Energy is generated and consumed is undergoing a massive shift - this change is dubbed Energy Transition. This is a topic that I have been reading, writing, and learning about for over a year. Previous posts on this very topic can be accessed here:

This post covers two interconnected topics 

1) A primer on HVDC and FACTS - especially their significance in the GRID with the increasing renewable component especially solar and wind capacities

2) We deepdive into Indian Power Equipment Manufacturer: Quality Power Electrical Equipment Ltd

Its a long post...so bear with me

HVDC and FACTS

What is HVDC?

HVDC: Long-distance transmission using a high-voltage Direct Current.

The grids are generally AC (Alternating current) and operate at a specific frequency. For long-distance transmission, it is better to convert it into DC and transmit.

HVDC is more efficient - (1) Long Distance Transmission (2) Connecting different grids whose frequency is not the same (3) Undersea transmission (between countries)

Quality Power has 4 products that go into HVDC i.e. reactors, line traps, instrument transformers and medium-voltage oil-filled transformers (for special applications, like zigzag-connected earthing transformers). 

Also attempting to add more products in that same segment.

What are FACTS ?

FACTS- Flexible AC Transmission Systems

To understand why FACTS are a critical component of the Transmission System, especially when the renewable component in the grid increases, we need to learn about Reactive Power.

Reactive power is power that is reflected back to the grid, while active power is the power consumed by the load.

To give you an analogy, active power is like fuel that makes an engine run, while reactive power is like the lubricant that keeps the engine moving smoothly—it doesn't make the engine run, but is essential for proper function.

Reactive power is essential for voltage control and system stability, as insufficient reactive power can cause voltage drops, while excess can lead to over-voltages and increased transmission losses.

There are different types of FACTS

More renewables in the Grid require more FACTS to stabilize the grid. Why?

Renewable energy, especially Solar and Wind, is Variable and Intermittent - the unpredictability stems from both weather and day-night cycles. The unpredictable output from renewables can cause voltage fluctuations, surges, or drops, potentially damaging equipment and degrading power quality.

Further, these power sources are usually decentralized, which complicates the power flow management and increases the likelihood of congestion and transmission losses.

Traditional power plants use large rotating machines that naturally stabilize the grid. Renewables lack this inertia as well, making the grid more sensitive to disturbances and increasing the risk of instability.

…. the solution is FACTS

Further reading

I would also like to draw your attention to the post “Transmission Challenge and Opportunity”.

The key point I want you to remember is that the grid needs to be more flexible to cater to intermittent power generation by renewables.

Quality Power Electrical Equipment Ltd

• Established in 2001. IPOed in 2025. In this journey, they have grown inorganically and added capabilities via acquisitions

  

  

• Manufactures High Voltage Power Products (Coils, Transformers and Instrument Transformers) and Power Quality Products (Static VAR Compensators, STATCOMs and Harmonic Filters, Capacitor Banks and Shunt Reactors)

• It is not a domestic market-oriented company but rather supplies globally (to over 100 countries in the past 2 decades). Has manufacturing facilities in India and Turkey.

• Also focused on R&D - Sangli facility is NABL accredited. Investment in Nebeskie, which specializes in real-time monitoring and analytics capabilities (which could be a smart grid solution)

Scaling Capacity to Drive Growth

The industry in India is expected to grow at 15%+ and HVDC and FACTS at 60% plus. This is an Industry where a lot of technical know-how is required, and there are not many players.

Looking at through the Lens of Capital Returns by Edward Chancellor

The key idea is to look at from the perspective of Capital Cycle and to look at Supply Side Dynamics

From the demand side, we are clear that it is a booming market. But on the supply side, there is a need for substantial capacity to meet the demand.

This is accentuated more in the high-voltage projects, where delivery timelines have expanded to a great extent. We can gauge the supply coming in when the timelines start shortening.

Shortage in Coil Products as well

There are significant Barriers to Entry

As far as Quality Power is concerned, they supposedly are doing well in FACTS with a strike rate of 60%-70% in winning bids.

HVDC order is 50-150 Cr (2-3 Year execution period billed every month) while FACTs order is 20-50 cr (12-15 months)

and the only manufacturer of Coil Products in India.

Their products might be going into the final products of Electric Capital Goods Players. So, in a sense, Quality Power is a second-order player in Electric Capital Goods.

Capacity Expansion and Guidance

• Expanding its production facilities in Sangli, Cochin, and Bhiwadi.

• Has acquired 10 acres of land close to its headquarters to set up a new facility in Sangli.

  It will make the coil capacity 9X - expected to be completed by Q2FY27

• The Cochin facility is being expanded to double its production capacity - expected to be completed by Q3FY26.

• Mehru in Bhiwadi is increasing capacity by 45% - expected to be completed by Q3FY26.

• Post expansion, at peak utilisation, the company can clock annual revenues of INR 2,000cr

• Expected Revenue Trajectory (based on Q4 FY25 Concall)

6X growth in 4 Years

• Margins: Blended margins expected in the range of 16-17% - The Mehru acquisition will lead to revenue growth at the cost of reduced margins compared with the standalone Quality Power Business

• Inorganic Growth: They have in the past relied on inorganic growth, with Mehru being the latest one. They claim that they are able to expand the margins, but the proof of the pudding is in eating, so does the management walks the talk or not has to be seen.

They announced the buyout of Sukrut Electric

More on HVDC and FACTS

Some snippets from Concalls I found interesting to know more about the company

Nebeskie (they are increasing stake to 24% here)

Risks

Apart from the usual raw material risk (mainly metals in this case). There are certain risks we need to be wary of:

Geo-political Risk (Turkey Operations)

Turkey operations are where the most value-added products are being manufactured. The geopolitical risks with Turkiye supplying drones to Pakistan in the India-Pakistan Conflict backlash against Turkiye’s businesses in India, there can be repercussions against Indian operations in Turkiye - capital controls, etc., can’t be ruled out.

The Turkish operations are very important for Quality Power as they do a lot of international business through Turkiye and execute products at the top end of the value chain there.

Management will, of course, try to pacify investors, but one has to be wary of developments.

Backward Integration

Just thinking out loud, given the current tight supply-side conditions, the customers (other capital goods companies) can also look at integrating backwards. The same has happened in other industries as well from time to time.

Related Party Transaction

Management loan to Company - I don't know what the incentive is. 

Technical Analysis

Full Disclaimer: I do have a position in this company - This is not an investment advice

To Sum Up

Operating in fast growing sector with moats. However, the key thing is to look beyond the growth projections and actually track if they are delivering on the guidance given.

Market so far has given thumbs up and clear sign of accumulation is there on the chart.

Not a recommendation. 

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• India is 6th largest chemical producer globally; 3rd largest in Asia after China and Japan.

• Contributes 7% to GDP

• India’s chemical consumption was valued at approximately $220 billion in 2023 and is projected to grow to $400–450 billion by 2030.

  • By 2040, it is expected to nearly double again, reaching between $850–1000 billion.

  • Major driver of this growth is the surge in disposable incomes, which is anticipated to add around $1500 billion to overall consumer spending by 2030.

  • The near-term vision is to take India’s share in Global Value chains to 5-6% by 2030 from the current level of 3.5%.

• Chemical Industry is dominated by commodity chemicals or upstream chemicals. This is evident from the feedstock conversion % vis-a-vis Global averages

• Plus India has a trade deficit in Chemicals at approximately $31 bn.

This points to the fact that there is significant scope for (1) Import Substitution (2) Moving downstream into spec chem  

Pillars to accelerate growth

1. Export Market Expansion - focus on strengthening high-potential segments such as agrochemicals, dyes, pigments, to tap into growing international demand.

2. Investment in Sunrise Sectors - including battery and electronic chemicals etc. to position India at the forefront of emerging technologies.

3. Improve Production Competitiveness - enhancing domestic capabilities in key segments like PVC, VAM, EVA, and Nylon-6 etc.

4. Aid Technology Access - by targeting import-dependent products such as acetic acid, MDI/TDI, PC resins, and plastic additives etc., reducing reliance on external sources and fostering self-reliance.

So for opportunities looking for companies increasing capacities, going downstream, introducing new products, import substitution and tie-ups for technology or development of technology

Some of the products where technology partnerships are being sought - potential areas of focus

Policy level Support / Intervention

Creation of World Chemical Hubs and Development of Port Infrastructure

This intervention is inspired by Singapore’s Jurong Island (3% of Singapore’s GDP) and Saudi Arabia’s Jubail Industrial City (7% of world petrochemicals).

Key features of the park are: 1) strong feedstock integration - creating an ecosystem for downstream production; 2) shared infrastructure- reducing opex; 3) Multi-modal connectivity

Plus proactive support from the government and furthering sustainability initiatives reducing carbon footrprint (Chemicals is a carbon heavy industry)

The fact is India already has four approved chemical hubs - in Visakhapatnam (Andhra Pradesh), Dahej (Gujarat), Paradip (Odisha), and Cuddalore and Nagapattinam 16(Tamil Nadu) (approved but on hold) - that have made some progress in attracting investments and creating jobs, there are still critical areas that need further attention to fully realize their potential.

These regions have already made significant progress in establishing infrastructure, attracting anchor tenants, and laying the groundwork for chemical industry development. However, they face challenges related to infrastructure quality, financial incentives, and regulatory complexities.

To maintain global competitiveness, these regions would need to improve infrastructure, streamline regulatory processes, prioritise sectoral growth, and address environmental and community issues.

Enhance Feedstock avaialbility - Enhance Cracker Capacity

Enhancing cracker capacity at Dahej and Paradip is crucial to meet the growing demand for petrochemical products and improving operational efficiency. Dahej, which already hosts the largest petrochemical plant in India, can further solidify its position by expanding its cracker capacity, thus ensuring a steady supply of ethylene and propylene for downstream industries. Improving shared infrastructure such as utilities, logistics, and waste management systems at both sites can reduce operational costs, enhance efficiency, and attract more investments

Creation of New Chemical Clusters

Connectivity

Chemicals is one of 12 industries identified as a focus area for major ports in the Maritime India Vision 2030

Waste Management Systems

Provide sustainable solutions for effluent treatment and waste disposal to meet environmental compliance. Waste disposal to be handled inside the chemical parks. Deep sea discharge standards to be at par with global standards

Sustainability is no longer optional. The next phase of growth in India’s chemical industry will depend heavily on green chemistry, circular economy principles, and low-carbon manufacturing. 

Zero liquid discharge (ZLD) norms and Common Effluent Treatment Plants (CETPs) in chemical hubs is the way forward

This is a potential theme to track

To conclude

With geopolitical realignments, increasing focus on self-reliance, and rising demand for greener products, India is uniquely positioned to become a global chemical manufacturing hub. If it addresses structural challenges and drives innovation, the industry can significantly contribute to India's ambition of becoming a $5 trillion economy.  The chemical industry may not always be visible to consumers, but it is foundational to nearly every product and process in the modern economy. As India builds its industrial base for the future, chemicals will remain a core enabler — quietly but powerfully shaping progress across sectors.  

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The Kill Chain by Christian Brose

Key Ideas from the Book the Kill Chain

1) The US Defence is centered around dominance and offensive operations. They have a small number of large platforms (like the Aircraft Carriers) with their operations requiring huge logistics (Relatively speaking…the author is comparing, let’s say aircrafts with UAVs). While this mode of operation was optimal in the Unipolar World, where the US was the supreme power, today it’s not the case. The world has now changed with China emerging as a competitor/rival, and the US doesn't have an edge, or the edge they enjoyed is rapidly diminishing.

2) The old way of operations is vulnerable. The Chinese can easily disrupt the logistics required for US operations. They can inflict major damage to the US forward bases in the like of countries like Japan.

3) The warfare has become largely asymmetric. The need of the hour is not platforms that require huge maintenance. What you need are intelligent systems with low cost - these will be expendable, and rather than maintaining the forces can procure the latest technology right away.

4) The Defence Industry in the US got consolidated. The incentives were not properly aligned. Although the US is forefront of technology, the same does not trickle down to the Defence Sector. As bureaucracy increased, the process of developing military technology became harder. The technology tailwinds happened in other sectors. The budget process is delayed, and hence, money goes to the existing programs with very little room for trying and iterating new technologies.

5) The future requires network-centric distributed systems where intelligent machines communicate with each other to complete the Kill Chain (Understand, Decide, and Execute) in real-time with minimal human intervention.

The following quote from the book highlights the dauntingness of the task:

Most of these allegedly information-age military systems struggle to share information and communicate directly with one another to a degree that would shock most Americans. For example, the F-22 and F-35A fighter jets cannot directly share basic airborne positioning and targeting data despite the fact that they are both Air Force programs and built by the same Company.

Let’s delve deeper into the concepts from the book and their relevance in the Indian Context

1. What is Kill Chain?

The kill chain is a process that occurs on the battlefield or wherever militaries compete. It involves three steps:

The first is gaining understanding about what is happening. The second is making a decision about what to do. And the third is taking action that creates an effect to achieve an objective.

Better understanding, decisions, and actions are what enable militaries to prevent unnecessary loss of life-both their own people and innocent civilians.

The Kill Chain emphasizes the critical need to update the traditional battlefield process—understanding the environment, deciding on action, and executing with effect—by integrating emerging technologies and dynamic networks of intelligent machines. The U.S. experience, as Brose details, shows that failure to innovate and procure cutting-edge capabilities leaves forces vulnerable to peer competitors like China, who leverage networked sensors, AI, hypersonics, and autonomous systems to gain battlefield advantage.

For India, this presents a clear imperative: the defense kill chain must evolve from slow, bureaucratic processes to agile, technology-driven networks that can rapidly sense, decide, and act. This means embracing and investing in AI-enabled command and control, unmanned systems, and integrated battlefield awareness to counter regional threats effectively.  

2. What are the Objectives?

All too often in defense, we think the measure of our strength is our platforms-individual vehicles and specific advanced military equipment and systems. We generate our requirements for military power in terms of platforms. We build our budgets and spend our money on the basis of platforms. We define our goals for military capability in relation to platforms.

Indeed, platforms often rise to the level of defining the very identities of military institutions. Leaders too often seem to lose sight of the larger objective-the reason why we would want any platform in the first place.

The goal of the military should not be to buy platforms. The goal is to buy deterrence, the prevention of war. And the only way to deter wars is to be so clearly capable of winning them that no rival power ever seeks to get its way through violence.

Thinking in terms of holistic objectives rather than in terms of Platforms. What gets measured gets managed, i.e., when something is tracked and measured, it becomes a focus of attention and effort. The goal, however, is not a particular platform but rather a holistic view on creating deterrence. 

3. Asymmetric Warfare

The warfare is increasingly becoming Asymmetric, where low-cost systems can effectively destroy high-value military platforms. A terrifying example of this asymmetry was the destruction of the Russian Bomber Fleet by Ukrainian drones.

Over many decades, we have built our military around small numbers of large, expensive, exquisite, heavily manned, and hard-to-replace platforms that struggle to close the kill chain as one battle network. China, meanwhile, has built large numbers of multi-million-dollar weapons to find and attack America's small numbers of exponentially more expensive military platforms.

The need of the hour is to leapfrog. Fusion of technologies is required to create asymmetric solutions. 

Drones in the recent conflicts have shown to be very asymmetric - India has a good drone ecosystem. The planners also recognise this, e.g., calling for the entire country to be restricted airspace for drones and focusing on unmanned aerial vehicles as well as submarines. Fusing technologies with air defence and artillery.   

4. Network-Centric Warfare and AI

Emerging technologies would enable militaries to build new battle networks of sensors and shooters that could close the kill chain more often and more rapidly than ever, that these battle networks would rely far more on advanced machines than on human beings, and that this new kill chain would render many traditional military systems vulnerable and obsolete.

The key feature of the Op Sindoor was the demonstration of the Integrated Air Command and Control System (IACCS), whereby multiple systems and platforms are connected to a network to provide a unified response. Not only are the new systems integrated, but the legacy systems have also been upgraded and connected to the network. 

The next step is automation in communication between different systems and platforms to take real-time action. This will require the indigenisation of the defence hardware and software giving full control.

Part of the reason why India is looking to develop its own 5th Gen Aircraft program is that only indigenous aircraft will be able to fulfill the requirements of being network-centric. (Remember the issues faced in integrating Indian Missiles in Rafale)

5. Building Military-Industrial Complex

Factories win the war. This is going to be relevant in the upcoming conflicts. The goal is to get the best technology in the hands of the Defence Forces.

China, for example, uses Saam, Daam, Dand to get the technologies they need (not to underestimate their own research capabilities)

What makes the Chinese Communist Party's technological ambitions even more threatening to the United States is a major way that Beijing enacts them-through a systematic global campaign to capture the world's best technology by whatever means necessary, which includes a massive foreign intelligence operation to steal trade secrets and intellectual property through cyber espionage and human spying. It also includes pressuring foreign corporations that seek to open operations in China-either as manufacturers or to sell to Chinese consumers-to hand over their intellectual property to the Chinese state as the price of doing business there. It includes the coercion of Chinese students at foreign universities, including at US universities, to spy on their peers, steal their research, and transfer it to the Chinese government. And it includes the deployment of significant sums of capital to invest in high-tech start-ups in Silicon Valley and elsewhere, establish ownership positions, and send their intellectual property back to China.

Focus on building indigenous development and manufacturing capacity.  

6. Spending for the future

The timelines to procure defence equipment need to be shortened. The required capability must first be delivered at the earliest time and iterated to perfect it. It is more imperative now to foster innovation and competition, engage the private sector (opening of AMCA for private sector is very positive signal) , startups and academia.

A flexible budgetary mechanism can be given to the forces to experiment with new technologies.

Build core technological capabilities domestically, especially in critical areas like jet engines, hypersonics, and AI-powered systems.

To Conclude

India is at a critical juncture in modernising its defence.

The way forward is modernization through technology, streamlined processes, and empowered human capital

Legacy defence must pave the way to a modern network-centric, distributed, resilient kill chain and surpass regional adversaries. This requires bold reforms in procurement, increased investment in indigenous innovation, and a cultural shift toward embracing intelligent, networked warfare.

To focus more on the overall objective of deterrence in a conflicted neighborhood.

If these elements are integrated, it will not only enhance military readiness but also establish it as a global defense manufacturing hub, securing its strategic interests in the Indo-Pacific and beyond.

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APAR Industries is a global leader in conductors, cables, and specialty oils - a direct beneficiary of investments in the power sector, particularly with a thrust on renewables.

After a 6X profit growth in 4 years, APAR in FY2025 reported a rather subdued performance with significant margin pressure leading to no profit growth.

Shall we discard the company after 1 year of dismal results? There is a significant overhang due to US tariff uncertainty and competition from China in certain markets. However, from my scuttlebutt to whomsoever I have interacted with from the industry, I’ve always heard positive things about the company.

They have been quietly laying the foundation for a multi-year growth cycle — through investments in capacity, Premiumization and reducing cost through digital transformation (Industry 4.0 related enhancements in operations) and remain a key beneficiary of global trends like energy transition, grid modernization, renewable energy adoption, and telecom digitization.

The elephant in the room- US Tariffs

There is a lot of uncertainty about how the tariff situation will pan out. India is yet to sign an agreement with the US.

Well, there is no easy fix for the US to substitute its $20bn import of Cables and Conductors with domestic manufacturing in a short time frame. However, the tariffs can very well dent the margins in the geography.

In the near term, the customers might be looking at absorbing the tariffs as they intend to finish projects on time (cost of time overruns in a project > tariff differential) but on a long term basis they might demand to put warehouse capacity in the US whereby customer is not in the tariff picture (although the prices will reflect the permutation/ combination of tariff impact on different suppliers)

US Tariffs are the biggest source of uncertainty + push on conventional energy in US is creating headwinds

Chinese Competition

Basically, exports are facing headwinds

Long Term Tailwinds

1) Investments in Transmission Infra

~30% of Transmission Capex is Conductors!! 

Well-positioned to benefit from this capex super-cycle, given its extensive portfolio in conductors, specialty cables, and transformer oils.

and transmission infra investments have to be made proactively in advance- the time for setting up a power plant especially for renewables is less than required for setting up the power evacuation infra

For APAR since they supply to both Transmission Infrastructure as well as Solar Cables and Wind Cables, i.e. the generation side infra, the best case scenario is that power evacuation is planned well in advance otherwise one segment will perform while the other will suffer.

Part of this opportunity will be reconductoring to increase the transmission capacity

One of the major issues in putting transmission capacity is the Right of Way, so if you can increase the capacity of the existing infrastructure, it becomes the most preferred solution. 

2) Opportunities in cables for renewables

APAR’s market share in wind and solar cables positions it as a leader in the renewable energy cable market. I’ll not go much into the opportunity here (which is tremendous given India’s target of 500GW renewables by 2030), but a caveat here is that, because of the slow pace of evacuation of power from the renewable assets, reduced investments are probable here.

Case in point

The management however feels that Windmill Sector is poised for growth

Addition of Wind Power and Modernization of existing Windmills

To understand more about windmill modernization, I found this interesting explainer

3) Opportunities in Data Centers

Supplies to major data center companies in India

and now in global vendor list for Microsoft

How is APAR Navigating these Challenges and Opportunities

1) Gearing up investments: Demand will come but can’t time the demand - so putting up capacity

Capex plan of 1300 cr to be commissioned in 18 months: 800 cr cables, 300 Cr Conductors and 200 cr Oils (building a storage terminal at JNPT)

To give context the planned investment in cables in next 12-15 months (commissioned in 18) is greator than cumulative investments from FY18-FY25 (741 cr) 

2) Premiumisation

Move towards premium products is expected to boost profitability, benefiting from lower competition and higher margins in this category. And innovation / premiumisation is the strategy to keep competition at bay

3) Focus on improving efficiency

Technical Analysis

Still over 30% down from ATH. Has a good bounce (over 80%) from the bottom. After an urgency shown in the run-up from the bottom, it is consolidating tightly in a ~10-11% range.

I've outlined the broader contours around APAR. The plan here is to follow price action and news, especially on the India-US Tariff deal. I am invested (had purchased in recent pullback- the anticipated volumes haven't come, but the SL is yet to be triggered). 

To conclude let me quote Howard Marks

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This post is about the why of Energy Policy decisions. The world is changing, and that is impacting the energy policy decisions. 

What is shaping the energy policy of the countries?

The global geopolitical landscape is undergoing a profound transformation, shifting from a unipolar or bipolar world dominated by a few superpowers to a more fragmented, multipolar arena where emerging powers assert greater influence.

I suggest EAM’s book “The India Way” and Ray Dalio’s “Principles for Dealing With The Changing World Order” to understand more about the changing world order.

In this evolving order, nations are increasingly adopting "nation-first" policies, prioritizing domestic interests over global cooperation. This inward turn has led to rising trade barriers, a retreat from global supply chains, and signs of deglobalization.

The trade barriers are evident with the heightened trade war and uncertainty about tariffs. 

Looking at it from the lens of game theory, this can be seen as a shift from cooperative strategies in a repeated game — where trust and mutual benefit previously underpinned global trade, to a more zero-sum, non-cooperative framework. Countries now perceive the payoffs of self-reliance and strategic autonomy to outweigh those of interdependence, leading to Nash equilibria that favor protectionism over collaboration.

Energy is a foundational pillar of national stability and prosperity. A reliable and secure energy supply is critical for economic growth, industrial productivity, and national security. With so much geopolitical uncertainty going around and shifts in the world arena, Energy Transition, which ensures energy security, becomes paramount.

Energy security = Shift to Non-Fossils

Non-fossil fuels are not traded and are local.

If you don’t have fossils, you will try to increase the supply of nuclear and renewable energy. 

Energy security is emerging as an urgent priority. Oil dependency has created a security vulnerability that needs to be tackled.

The situation has become more profound with the transition of the US from being a net importer to a net exporter. The earlier arrangement incentivized the US to invest in securing global trade routes. Now, securing global routes is not a priority.

This objective would drive investments in renewable energy and nuclear for India as well. It is evident by the ongoing investments, e.g. India at #2 in the world in terms of nuclear capacity under construction

and it is set to accelerate

The pecking order of energy decisions seems to be Security > Economic Efficiency > Environment

This, in my opinion, leads to a virtuous cycle. The case in point being China, where energy security concerns bolstered investments in green energy, driving up the economic efficiency of renewables through economies of scale and technology breakthroughs.

China didn’t build its renewable power, energy storage, and electric vehicles industry to comply with the Paris Agreement of 2015 - the transition began in the early 2000s, setting targets for energy security. They achieved peak fossil imports in 2019.

Electrification - enabler of energy security

Applying this framework to India

India is highly dependent on imported crude oil. India hedged its bets by having its own refining capacity and hence going downstream in the value chain.

However, now there are other players on the table for diversifying the energy mix - Solar, Wind, Nuclear.

These non-fossils are likely to get priority to diversify the burgeoning energy needs of our country. 

India’s Dependence on Fuel Imports

Crude oil contributes to more than 30% of India's total primary energy supply and is the second largest after coal at ~58% (fiscal 2023). Crude oil has been the main source of energy in the transport sector over the past few decades.

Due to high import dependence, India's energy security is severely impacted by price and supply shocks of crude oil in the international market. Crude oil imports also make a significant impact on India's foreign exchange reserves.

INR has weakened - the INR/USD exchange rate has risen from 64.4 in fiscal 2018 to 82.8 in fiscal 2024. This not only widens the trade deficit but also raises input costs for auto production and fuel prices. Further, volatility in crude prices is a threat to the economy as it impacts the price stability of fuels in India, driving inflationary pressure.

India could potentially lower its dependence on imports based on its ability to substitute/replace crude oil with other energy sources, that can result in a positive effect in the Indian economy. There is a thrust on demand substitution, promoting biofuels and other alternate fuels/ renewables, EV charging facilities and refinery process improvements for reducing the county's oil dependence on imported crude oil.

To Sum Up

The key driving factor for energy transition is securing energy, leading to growth in renewable and nuclear, but at the same time, continued reliance on fossils, depending on the resource availability/securing resources in various geographies.

Every country will require a different optimal mix of energy sources with energy security at its core. This will accelerate the Electrification trend.

For India, the best way forward seems to be investing in Renewable/Nuclear to reduce the crude oil import dependence. 

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Unimech Aerospace & Manufacturing operates in

(1) Aero Tooling/MRO tooling: This is 85% of their business at this stage. Aero engine tools for LEAP, Pratt & Whitney, and Rolls-Royce engines; Airframe tools for Airbus & Boeing.

(2) Precision Components and Assemblies: 15% of revenue. Precision parts and assemblies for Nuclear, Aero, Defence, and other Emerging Industries.

(1) FY2025 Results

Only 16% growth. Given the hefty valuation (looking at the PE metric), this growth gives nothing to cheer. 

The relatively higher profit growth (compared to EBITDA) is mainly due to other income from investments (IPO proceeds) and hence is not core growth.

There has been a significant capacity addition in FY25, which gives room for 3 years of growth.

(2) But the market reaction was completely different

Technically, it broke out strongly. 
It is a case study on gaps as well as on support and resistance. 
Look how the area that was once a resistance zone turned into support.

(3) Huge Capacity Addition

• Capacity has been increased in a step function.

• Utilisation has dropped to ~55-58% levels

   Case for operating leverage in the future as they increase their utilization. As per management, they expect to reach ~85% capacity utilization in 3 years. 

(4) Sector Tailwinds - Engine Development

After the Op Sindoor, there is renewed attention and a push towards Atmanirbharta. The strategic areas need indigenous systems, subsystems, parts, and materials. An area of strategic advancement for India to enhance the defence forces is the Engine Development for indigenous Air Force Assets (Fighters, Helis, UAVs, etc)

An important development is the approval of the AMCA programme. It is important to note that Private Industry is being given equal opportunity

Press Release: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2131528

A key challenge for Indian Aircraft is the Jet Engine. Clarity will emerge in due course on whether we are moving ahead with indigenous engine development or with a foreign collaboration, or whether two to three different programmes will go parallel.

Whatever the case, Unimech can support the programme in providing tooling or precision parts. Domestic Private Players will be an integral part of this programme.

Strategic partnership

Exclusive manufacturing agreement for the production of micro gas turbine engines developed by Dheya and manufactured by Unimech, including orders for sub-systems.

Frankly, this area needs more research on how capable Dheya themselves are and what the opportunity could be for Unimech. They have a roadmap for a 30% stake in Dheya.

(5) Sector Tailwinds - Nuclear Energy

IMO, the principles behind the Energy Policies across the globe are changing. The pecking order for policy objectives seems to be 

Energy Security > Economic Efficiency > Environmental Concerns

With this quest for security, an important part of the Energy Mix is going to be Nuclear. I’ve alluded to this in the post on SMRs.

Q4 Concall: NPCIL planning 11 new reactors. Each reactor budget is above 1000 cr; Unimech plans to participate in 15 subsystems - an opportunity of 400cr in each reactor. Plus, there will be opportunities in SMRs.

(6) Sector Tailwinds - India’s growing Passenger Aviation Market - Commercial Sector MRO

India has become the 3rd largest passenger aircraft market. The MRO sector is expected to grow from US$ 1.7 Bn in 2021 to US$ 4 Bn by 2031. (Niti Aayog report cited in concall)

Engine MRO is a moated space - they work with both LEAP and Rolls-Royce Engines

Tailwinds are great, but execution is paramount. Valuations don’t leave any room for error.

• The guidance for FY2026 is a 40% growth. Currently, the company is export-heavy, and that too to the United States.

  With the US, there is a lot of uncertainty about tariffs. Plus, the policy on high-tech sectors is very unpredictable. Management itself expects Q1 and Q2 to be slow.

• Currently, the mix between Aero Tooling/MRO to Precision Component Segment is 85:15. Precision Component has relatively lesser margins. Going forward, growth in precision will outpace Aero Tooling/MRO

  Although they don't want to go below 35% EBITDA margins. The business mix change will put a relative pressure on the margin.

Disclaimer: At this stage, this is a technical bet for me. There are too many moving parts. The taiwinds are immense, but given the kind of industry they are in, I think it will take time to materialize.

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Check out the previous posts for more details about the Company:

Q1 FY 2025 Result Update

Q2 FY 2025 Result Update

(1) Strong continued performance

In the past 3 years, Zen has performed extremely well, ~14x topline in 3 years.

(2) Bolstering capabilities through acquisitions

We have seen Bharat’s Air Defence in action during Operation Sindoor, which comprise not only of the S-400 or the Akash SAM but have integrated legacy weapons like the Shilka and L-70s, which have been modernized with sensors and tracking systems etc. and were proved very effective in the modern warfare where drone comes in swarms aiming for saturation of defences and attrition of arsenal.

Now imagine a similar modernization happening to the ground forces, including their artillery weapons, etc. This can be game-changing in the conflict.

Foray into Naval Simulators with the acquisition of Applied Research International.

• As per concall, ARI has all the simulation products for the navy minus the weapon simulators (which Zen has)

Going deeper into the Drone ecosystem with the acquisition of Vector Technics.

The initial acquisition was UTS to foray into anti-drone systems, and this has become a new segment for the company. 

The recent acquisitions seem to be complementary to the existing operations and bolster the capabilities.

(3) Some excerpts from Concall

• Designed, Developed, and Made in India Solutions. Own IP

• Selected alone from the 2 companies in the RFP of 2023 for anti-drone companies. While a majority of anti-drone companies focus on 2 frequencies (commercial frequencies) but Zen’s solution is band-independent.

• UTS collaborated with DRDO for the jammer and detector (or maybe some parts of them)

• Chips are being procured from abroad (non-Chinese sources)

• Don’t have a laser-based anti-drone kill system

• Expecting cumulative turnover of 6000 cr in the next 3 years with 35% EBITDA and 25% PAT margin

• FY2027 is the year we should get orders in the US

• In the future, drones, anti-drones, and hard kill systems will be 70% of the business

• R&D expenses: Looking at 70 cr for the R&D facility and 5 cr for machinery. Expect 50-60 cr on R&D consistently, but there may be a lump sum R&D requirement based on opportunities

(4) Order-book Bridge

So what's next?

This is a manufacturing company. One of the leading indicators for growth is the order book. At this stage, they have muted orders at hand, given the fact that they have delivered on their orderbook leading to this strong growth.

But, future growth needs orders. They have guided for 800 cr of orders by H1FY2026 in the simulators segment. The overall order pipeline is for ~4000 crore.

Further positive triggers

✅ Emergency procurement: Orders are expected to trickle from the 40,000 crore emergency procurement. There is a sense of urgency towards modern warfare.

✅ Exports: Africa, CIS, and the Middle East are Zen’s main markets.

✅ EU-India FTA - potential opportunities from the EU as they up their defence spend (a positive for the huge industry, not just Zen)

Technical

Defence is one of the leading sectors. It has shown urgency in its upmove post Operation Sindoor.

So technically, it is nearing a low-risk entry, which I would be keenly observing.

To Sum Up

The sphere of operations Zen operates is poised for growth. They are going further in their simulation business by adding naval simulation capabilities and enhancing their capabilities in Drone and Anti-Drone Solutions. Plus, assisting forces with their capabilities in some unmanned robotics products.

There is a lot of uncertainty if we look at the current order book. Plus, the order receipts and execution are bound to be lumpy. 

This year, as per management, is expected to be muted, and accordingly, a long-term investment opportunity may strike again at a favorable valuation; however, given that defence is leading the pack, it can give good risk-reward technically, and be a momentum trade. 

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In the race to decarbonize and transition to a sustainable energy future, nuclear power is once again being touted as a key solution. From traditional large-scale reactors to the promise of Small Modular Reactors (SMRs), there's a growing buzz around a potential nuclear renaissance.  

What are SMRs?

SMRs (Small Modular Reactors) are a type of nuclear reactor - smaller in size and output compared to traditional nuclear power plants. They are designed to be factory-built, modular, and scalable, making them potentially more cost-effective and easier to deploy.

The SMRs are anticipated to bring forward the following advantages paving for clean nuclear energy

1. Smaller and Modular Design – In a range of 10-300 MW vis a vis conventional reactors which typically are in the GW range. With a modular design, they can be manufactured with ease reducing construction time and costs.

2. Enhanced Safety – SMRs may bring passive safety features e.g. cooling down without active intervention.

3. Flexibility – Can be used in remote locations, industrial applications, or even for hydrogen production and desalination.

4. Potential for Lower Costs – Mass production in factories could bring down costs compared to traditional nuclear power plants, which suffer from long construction timelines and budget overruns.

However, since this technology is still WIP the sailing is not smooth. There are challenges and concerns e.g. the existing nuclear regulations are designed for large plants, and adapting them for SMRs is time-consuming, Waste Management (larger nuclear plants benefit from economies of scale here) and the most critical challenge is the Public Perception i.e. concerns around safety and nuclear energy risks.

Nuclear Energy Supply Chain

Nuclear Energy in India

India has set a target of reaching 100 GW of nuclear power capacity by 2047, a sharp increase from its current 8.18 GW.

India plans to deploy 40–50 SMRs, reinforcing its commitment to a sustainable and scalable nuclear energy ecosystem

• The Department of Atomic Energy (DAE), in collaboration with Tata Consulting

  Engineers are reengineering Pressurized Heavy Water Reactors (PHWRs) for the Bharat Small Modular Reactor initiative

Bharat Small Reactors (BSRs)

• The Bharat Small Reactors (BSRs) initiative combines the proven Pressurized Heavy Water Reactor (PHWR) technology with modern deployment efficiencies.

• Designed as 220 MW reactors with an established safety record, BSRs are being optimized to reduce land requirements, making them ideal for integration with industrial sectors such as steel, aluminum, and heavy metals.

• By serving as captive power plants, BSRs provide stable, low-carbon energy to high-emission industries, supporting India's net-zero transition while reducing reliance on coal-based power generation.

• The public-private collaboration model—where private entities provide land, cooling water, and capital, while NPCIL oversees design, operations, and maintenance—ensures efficient capital deployment and regulatory compliance.

Small Modular Reactors (SMRs)

• Beyond BSRs, India is actively developing Small Modular Reactors (SMRs),

• Modular deployment, reducing construction costs and enabling factory-based manufacturing for faster scalability. Given India’s extensive experience in PHWR technology, it has a strong foundation to develop indigenous SMR designs, enhancing energy security while creating export potential in the global SMR market.

Advanced Nuclear Technologies

• India’s nuclear expansion is not limited to traditional reactors—the Department of Atomic Energy (DAE) and the Bhabha Atomic Research Centre (BARC) are researching cutting-edge nuclear technologies like:

  • High-temperature gas-cooled Reactors (HTGRs) for hydrogen co-generation, supporting India’s emerging green hydrogen economy.

  • Molten Salt Reactors (MSRs) to utilize India’s abundant thorium reserves, reducing dependence on imported uranium.

The Pro-Nuclear Argument

✅ A single nuclear reactor can generate as much electricity as thousands of wind turbines or solar panels, requiring significantly less land and infrastructure

✅ Low-carbon source of electricity that can provide baseload power, unlike intermittent renewables

✅ Optimism around SMR - Proponents claim that these smaller, more flexible reactors could be cheaper to build, quicker to deploy, and boast enhanced safety features with passive shutdown and cooling mechanisms. Some even suggest they could reduce nuclear waste and use uranium more efficiently

This vision has fueled significant interest, with numerous companies developing next-gen nuclear designs and a considerable pipeline of SMR projects in the works

Ground Reality

A closer look at the current nuclear landscape reveals a more complex picture, suggesting that the path to a nuclear-powered energy transition might be fraught with challenges and that the hype surrounding SMRs in particular needs a dose of realism. (Extrapolating the setbacks across the world to taper down the expectations)

❌ After dominating capacity additions in the mid-20th century, new projects collapsed due to various factors. Even the recent completions have suffered from significant cost overruns and lengthy construction times (especially in OECD region compared to developing economies)

❌ Skepticism from Industry Leaders: Even the CEO of NextEra, a major energy company, expressed strong skepticism about SMRs in 2022, viewing them as "an opportunity to lose money in smaller batches" due to high costs and technological bets

❌ Past Failures of "Next-Gen" Designs: History shows that not all innovative nuclear designs succeed. Molten salt and High-Temperature Gas-Cooled Reactors (HTGR) were attempted in the US in the past and abandoned due to poor performance.

❌ Poor Performance of Existing SMRs: Globally, there are very few operating SMRs, and their track record isn't exactly stellar. The only operational small modular HTGR in China experienced significant delays and operated well below capacity . Furthermore, existing SMRs in Russia and China, and one under construction in Argentina, have seen massive cost overruns (300%-700%) and significantly longer construction times than initially projected.

❌Uncertainty in Achieving Economies of Scale: For SMRs to become cost-competitive through modularization, a very high number of units might need to be produced. One study estimated that NuScale's VOYGR model would require over 1,100 units to achieve sufficient cost reduction. This raises questions about the feasibility of reaching such production levels in a timely manner.

❌Potentially High Costs: Despite the promise of lower costs, some Western SMR projects are estimated to potentially cost between $15 and $20 million per MW, which is far from the competitive levels needed.

❌Reliance on imported Uranium: Furthermore, the US, despite its nuclear capacity, relies on imported uranium and lacks sufficient domestic capacity for high assay low enriched uranium (HALEU), which is needed for some advanced reactor designs, causing delays in projects. India also relies on uranium imports and getting enough fuel might be a challenge.

Some Companies related to Nuclear (not exhaustive)

• ASHVINI JV between NPCIL & NTPC

• NTPC

• Naveen Jindal Group

  • Plans to invest ₹1.80 lakh crore ($21.6 billion) to develop 18 GW of nuclear power

• Adani Power

  • Has announced plans to develop 30 GW of nuclear power capacity

• Hindustan Construction Company (HCC)

  • Have contributed to over 5,780 MW of the country’s existing nuclear power capacity, with ongoing projects including the Rajasthan Atomic Power Plant - Units 7 & 8

• Walchandnagar Industries

  

• MTAR Tech

To Sum Up

The hype around a nuclear renaissance, particularly one fueled by SMRs, needs to be tempered with a realistic understanding of the technological, economic, and logistical hurdles that still need to be overcome.

The energy transition demands urgent action, and nuclear power may indeed play a role. However, relying heavily on a hyped vision of readily available and cost-effective SMRs in the near future might lead to disappointment. A balanced approach that acknowledges the potential of nuclear while recognizing the substantial challenges and focusing on proven, scalable clean energy solutions seems like a more prudent path forward.

And the same may be taken into account while making investment decisions

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1. How to Take Smart Notes

2. Stan Weinstein's Secrets For Profiting in Bull and Bear Markets

3. The Almanack Of Naval Ravikant: A Guide to Wealth and Happiness

4. Ten Drugs

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India's first-ever international conference on carbon markets, PRAKRITI 2025, was held on February 24-25 in New Delhi. Organized by the Bureau of Energy Efficiency under the aegis of the Ministry of Power and MoEFCC.

It served as a platform for discussions and ideas to enable India to launch a robust, efficient, and effective carbon market by mid-2026.

Why is it important to develop Carbon Markets?

Carbon markets turn climate action into an economic opportunity, making emissions reduction a win-win for businesses. It also nudges to invest more in monitoring the carbon intensity of industries.

Secondly, India ratified the Paris Agreement on Climate Change in 2016, committing to limit the global average temperature rise to below 2°C by the end of the century. The first pledge was to reduce the greenhouse gas (GHG) emission intensity of its economy by 33-35% by 2030 from 2005 levels.

In August 2022, the target was further revised by the government to 45% reduction in GHG emission intensity by 2030 from 2005 levels. The target looks aggressive, but India has already achieved the first target of 33% and, hence a level up

Between 2005 and 2020, India’s emission intensity of Gross Domestic Product (GDP) reduced by 36% as against the NDC target of 45% to be achieved by 2030. (Link)

With carbon markets, the companies will have an incentive to work more towards decarbonization. Especially the carbon-intensive ones.

What is Carbon Credit Trading Scheme (CCTS)

Carbon Credit Trading Scheme (CCTS) is a framework that allows entities to trade carbon credit certificates (CCCs) to reduce greenhouse gas (GHG) emissions in India. The scheme was notified in June 2023. It was amended in December 2023 (to bring in non-obligated entities).

Components of CCTS Mechanism

• Compliance: Obligated entities must meet GHG emission targets within a three-year compliance cycle

• Carbon credit issuance: Entities that meet or exceed their targets receive CCCs

• Carbon credit purchase: Entities that don't meet their targets must purchase CCCs

• Offset mechanism: Non-obligated entities can register projects to reduce GHG emissions and receive CCCs. BEE shall identify the sectoral scope and methodologies to be used under offset mechanism with the support of respective technical committees

  Illustration for Obligated entities

CCTS is aimed to reduce GHG emissions along with providing opportunities for decarbonization as well as creating a transparent and credible compliance mechanism.

Initially it would cover carbon dioxide (CO₂) and perfluorocarbons (PFCs), with provisions to expand to other greenhouse gases in the future.

(PAT: Perform, Achieve and Trade (PAT) is an existing regulatory instrument to reduce Specific Energy Consumption in energy intensive industries, with an associated market based mechanism to enhance the cost effectiveness through certification of excess energy saving which can be traded.)

Following sectors are proposed to be included in the offset mechanism in a phased manner:

How will it impact Energy Transition

The major theme in Energy Transition is (1) Electrify and (2) Decarbonize

This framework has both stick and carrot. Stick in the form of compliance for companies in obligatory sectors and carrot i.e. voluntary participation by non-obligatory entities. Plus any surplus in reducing emissions is an economic gain.

This may lead to accelerated adoption of clean technologies and as a matter of fact renewables are becoming cost effective as well.

This will also have a spillover effect to decarbonize industries like steel which is likely to focus more on Green Hydrogen or EAF. Companies are already investing towards this effort - part of the reason being uncertainity of evolving regulations in export markets especially in the developed world.

Snippets of continued efforts towards decarbonizing

SAIL

Tata Steel

Hindalco

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1. Best Loser Wins: Why Normal Thinking Never Wins the Trading Game

2. Stan Weinstein's Secrets For Profiting in Bull and Bear Markets

3. The Almanack Of Naval Ravikant: A Guide to Wealth and Happiness

4. Superagency: Empowering Humanity in the Age of Ai

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Prominent thinkers like Charlie Munger believed in having a "latticework of models" for understanding and retaining knowledge.

So what is a Mental Model? Think of mental models as different lenses through which you can view situations, which helps you make smarter decisions. Whether you're dealing with personal choices, work challenges, or even trying to grasp global issues - these lenses/frameworks equip you and help make everything a bit clearer and less chaotic.

Now, let's add another powerful tool to this toolkit—first principles thinking i.e. breaking down complex problems into their most basic elements and then building up from there - like peeling an onion, layer by layer, to understand the core components before reconstructing your understanding.

So the idea is to understand different mental models through first principles thinking to have a solid foundation for the tookit required in this 21st Century.

Today, let’s discuss the concept of Ergodicity:

ERGODICITY

Before I define it, let me give you a hypothetical investment bet:

What is Ergodicity?

Ergodicity refers to the relationship between the average outcome of a system over time (lifetime outcome) and the average outcome of a population performing the same activity once (population outcome).

If lifetime outcome = population outcome then the system is Ergodic, otherwise not.

Understanding ergodicity leads to decisions that minimize regret but maximize long-term potential. It is the study of how short-term consequences affect the long-term.

Back to the bet

So you have studied probability and calculated easily that the Expected Value is 20 Lakh (2 Cr X 10% + 0 X 90%). So this is a great bet with 1:2 Risk : Reward.

So should you take this bet?

Although the bet has a good expected value and positive risk reward ratio - 90% of the time you lose i.e. going to zero. We are heading to the risk of ruin 

So here the Lifetime outcome is a positive return. Like a VC model making lots of bets which have low probability but very high payoffs.

The one-time outcome is mostly ruin. If you can do this only once, you are highly likely to lose. For example, as a startup, you are more likely to fail than to succeed. The base rates are pitted against you.  
 
The key is repeatability. Are you able to bet again & again and be in the game? 

Focus on being in the game.

😵‍💫Confused?

Investing is probabilistic. It is prone to varied probabilistic outcomes. If you trade the same setup, it will still not give you a 100% win rate or the same risk/reward outcomes.

It behaves in a non-ergodic way e.g. when you invest, the path (whether you gain or lose money along the way) matters a lot. Looking at the average return doesn’t always tell you the whole story. Losing money early on can greatly impact your overall wealth, as you need disproportionate returns to break even.

What can we learn from this Mental Model?

(1) Survive: First protect the downside

Survival matters more than performance in determining long-term success. To be the greatest at anything, you must survive the trials, tribulations, injuries, mistakes, drawdowns, etc. that knock others out of the “race” before it starts.

• Performance matters most for success in a single race.

• Survival matters most for long-term success over many races.

• For example, a single injury can end a runner’s chance of racing again. Avoiding serious injury is key to long-term racing success.

• “In any endeavor in which success depends on you accumulating some kind of resource (money, skill, connections, trust, etc.), do not maximize growth regardless of survival. Instead, maximize growth that conserves survival.

  The chance of irreversible consequences must be considered in any repeatable activity. Ex: bankruptcy, injury, depression, burnout, break-ups, trust, etc.

(2) Position yourself for long term

Over a prolonged period, survival is more important than performance.

Focus on staying in the game. Even if you make average returns but are persistent enough to play the game long enough - you will come out victorious.

(3) Focus on sustained performance

The success of Diljeet Dosanjh’s Concerts took internet by the storm. But many don’t realize the years of hard work required to reach such a stage.

Music / Film Industry is also non-ergodic. There is no sure-shot formula for success.

Too often, we observe a snapshot of someone’s life and believe that we witnessed a piece of short-term performance. But if practice is required to get to a place where one can attempt that, then what we are really observing is long-term performance.

I believe that all the good things in life benefit from compounding. You have to be persistent in your efforts!!       

The aim is to sort risks into two types: serious risks that can cause major harm and manageable risks that you can recover from. The key is to completely avoid serious risks or minimize them enough so they become manageable.

There are different strategies for dealing with risk

Barbell Strategy (Taleb’s Incerto Series):

• Expose the majority of your time, money, and work to safe activities with only a small amount of time, money, and work to risky activities. The risky activities create an opportunity for a high payoff but the lower exposure limits the downside.

• The reduced chance of permanent loss allows for a small exposure to more aggressive activities. So long as the small exposure of time, money, etc. is something you can afford to lose.

• The tradeoff is that by limiting risk you limit upside.

Kelly Criterion (Fortune’s Formula)

• A betting strategy that finds the optimal betting size based on the odds and bankroll in an attempt to maximize wealth over time.

• Risk exposure depends on the odds/payoffs of a bet.

Pre-Mortems and Post-Mortems

• Pre-Mortems: Study is done before the project starts assuming it failed, to figure out how it failed and how to avoid it.

• Post-Mortems: Study after a project ends to find out what, if anything, went wrong and how to improve on it next time.

Invest in yourself…. be a learning machine.

These communities have helped me learn the nuances of investing. Why not check them out? - Join the community of learners.

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Book/reading recommendations

1. Ergodicity by Luca Dellanna

2. Incerto series of books by Nassim Nicholas Taleb

3. Finite and Infinite Games, by James P Carse

4. Fortune’s Formula

Supporting my work

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Disclaimer: I am not SEBI registered. The information provided here is for educational purposes only. This is not a buy or sell advice. I will not be responsible for any of your profit/loss based on the above information. Consult your financial advisor before making any decisions.

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This is a slightly edited quote from Bill Gates. Human nature tends to focus on the immediate future while being oblivious to the potential of the long term. Why? because we fail to account for the power of compounding, where even small, consistent actions can accumulate and lead to significant progress. Hence, it is worthwhile to step back, look at the bigger picture, and try to perfect processes that can lead to long-term wonderful outcomes.

So here the idea is not to look from a short-term perspective but rather to build processes that you can follow for the long-term and achieve great results over bigger timeframes.  

Know Yourself

Finance, trading, investing, or markets is essentially a game of psychology. Even the chart patterns are reflective of human psychology. Isn’t it how the support and resistance levels are formed!

It is imperative to understand our temperament, flaws, goals, and skills. Even the best money printing strategy will not help you if it does not align with your psychology or you are not able to follow it consistently.

You have to know yourself. Only when there is no resistance in following the path that super performance will be unlocked.

My motto here is Learn Unlearn Learn. Keep learning. Learn LifeLong. Always adapt.

Focusing on the process will keep you sane and make money in the long run

Results are random; perfect trades can lose while low-quality setups can be winners. This is what a probabilistic world is. The inputs and outputs are nit completely correlated - they are probabilistic. I always go back to this matrix:

Don’t be swayed by the outcome. Pat on the back if you followed the process. More data and reflections are aimed at improving the process rather than cringing about one outcome.

Remember, small consistent efforts in improving the process will yield long-ranging benefits. This is the power of compounding

Also, mental health matters more than your trading account health. Fixating on immediate outcomes erodes mental health.

Building blocks of your trading system

Let’s dive into the components of the Trading System

Pre-market Scanning and Watchlist

1. Scan the stock universe as per your strategy.

2. Create watchlists - may be immediately actionable, probable candidates, charts that seem constructive

3. Have the levels earmarked in advance and create alerts

Normally, I create alerts on trading view along with the relevant SL levels. Further, capture additional information like where the SL would be, accordingly how much risk is involved, and calculate the position size well in advance. So at the time of taking trade most of the things are already chalked out 

Executing Trades

This is the easiest part, when you have done your homework right. You have to create rules for yourself. For eg my basic rules are:

1. I will not chase extended stocks. Max SL of 8% (although I prefer it to be 6%) - so as to have a meaningful initiating position

2. The basic premise is to enter at a low-risk entry. Only then can I build meaningful position. Otherwise, I would clutter my portfolio and will be disoriented.

3. I will not indulge in futures and options

4. Never sell the full position in strength. When it moves up and you are without an iota of position pending then it is painful. Sell 30-50% to free roll your risk.

5. No Bottom Fishing.

6. Be selective, write for clarity.

Risk Management & Position Sizing

Risk management and position sizing can’t be independent of each other.

I am indebited to Tom Basso sir for his incredible yet simple book “Successful Traders Size Their Positions - Why and How?”

Basically, to manage risk you have to first measure it. I know sometimes there will be slippages or gap downs but if you are following Stoplosses religiously then that data can serve as a good approximation of the portfolio risk.

What I measure:

1. Open Risk in a stock

2. Portfolio wide open risk

3. Potential drawdown if all the stocks hit SL

Scaling: Buy a position with less risk and the stock is behaving as expected - the position can be scaled. Like from a .25% risk to an ideal 0.5% risk (for me). Don’t buy too much above the ideal buy point so that Risk / Reward does not topple.

Averaging up: This can only be done from a least-risk area i.e. pullbacks (preferable) or a new base breakout. The idea is if you can add to the existing name why add complexity - with a caveat that it must pass through criteria from a fresh trade perspective.

Partial selling in strength:

One of the ways to achieve a peaceful risk-reward bump is by selling some part of the position in strength. For example, if you get a 3X your risk, then if you sell 30% of the position you reduce your risk by 90%. At 2X risk, you reduce the risk by 60%.

Aftermarket

1. Update trading journal

2. Revise SLs

3. Make notes on the chart

4. Reflections on what you felt or are thinking

5. Monitoring Risk in the Portfolio

6. Capital Preservation should be on top of the mind always.

Benefits of continuous reflection:

The above process is iterative with room for improvement and hence reflections are very important. There are many things that I have found about myself or my trading through reflections like:

• To be curious about unknown names. Don’t be biased towards any names. Try to know more about each company. All companies can’t be investment-worthy, but if liquidity is there, they can be traded.

• The goal as a trader is to get to a point where you are trading from a calm and confident state of being so that you can observe what the market is doing from an objective point of view and execute your plan accordingly. I’ve struggled earlier in my career to put myself in the trader box or investor box.

The most difficult thing is to have two contrasting ideas in your mind at the same time and both are right from different vantage points or objectives. So, I now clearly define whether this is trading or investment. Anyhow the trading is mostly positional and I invest very less directly in equities (invest through mutual funds plus have a separate account for experimenting with holding on only based on thesis)understanding what you own and why and what your time horizon makes a difference.

To sum up

Having your own plan help navigate the markets with discipline, confidence, and consistency. It is essential for long-term success, to ensure that the strategy aligns with your risk tolerance, personality, and financial goals, and helps avoid emotional decision-making as well as impulsive trades.

A structured plan and process promotes consistency, risk management, and disciplined execution, reducing costly mistakes. It also provides clarity and confidence, allowing to follow a set process rather than reacting to market noise. Moreover, tracking and refining your plan over time leads to continuous improvement. Since no single strategy fits all, a tailored approach enhances sustainability and profitability in trading.

Reflect and you may find your own questions and answers. 

All the best. Remember this is a continous process.

*****

Invest in yourself…. be a learning machine.

These communities have helped me learn the nuances of investing. Check them out and join the community of learners.

Technofunda Membership

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Free Course by Vivek Mashrani (TechnoFunda Investing)

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TradingView Affiliate Link

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Resources:

What I am Reading this Month:

1. Best Loser Wins: Why Normal Thinking Never Wins the Trading Game

2. Stan Weinstein's Secrets For Profiting in Bull and Bear Markets

3. The Almanack Of Naval Ravikant: A Guide to Wealth and Happiness

4. Superagency: Empowering Humanity in the Age of Ai

5. Never Enough: From Barista to Billionaire

   Finished reading

Felt like an honest glimpse into the life of a billionaire. Makes you question the purpose of money in our life.

Supporting my work

If you got this far, chances are you find my writing valuable. So please spread the word! Sharing, liking, and commenting all help spread the word!

Share

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Disclaimer: I am not SEBI registered. The information provided here is for informational purposes only. This is not a buy or sell advice. I will not be responsible for any of your profit/loss based on the above information. Consult your financial advisor before making any decisions.

But how do we get to the intrinsic value…here we are guided by frameworks

The idea of having different frameworks is to pay attention to what is important and the ability to get better outcomes by (1) Looking from different vantage points (2) attempting to stack the probabilities for increasing upside and reducing downside.

This was infact one of the key learning from Raamdeo Agrawal Ji - to evaluate ideas through the lens of different frameworks.

The objective of this post is to understand the framework “Terms of Trade” (11th MOSL Wealth Creation Study 2001-2006)

What are Terms of Trade

Terms of Trade here means the relationship between a company’s creditors and debtors. It is, essentially, the balance between what a business owes and what it is owed.

In simple terms, ‘Terms of Trade’ refers to the ratio of debtors to creditors. If a company has more creditors than debtors, it enjoys a natural source of working capital, reducing the need for external financing. Conversely, if debtors exceed creditors, the business must deploy additional capital to sustain its operations, potentially impacting profitability.

Favorable Terms of Trade can signal competitive advantage.

A business with favorable ‘Terms of Trade’ often requires little working capital and enjoys strong free cash flows. Companies that can negotiate better terms with their suppliers (longer credit cycles) while maintaining short debtor cycles tend to have a significant competitive advantage.

From the Porter 5 Forces framework - it may mean lower bargaining power of - buyers and suppliers.

Importance of “Terms of Trade”

• High-growth companies create the bulk of the wealth. The faster the growth, the faster the expected wealth creation. However, growth requires cash to fund their growth - this is where the terms of trade we look at the sources of operating cash flow.

• To operate a business, typically two types of capital is required i.e. Fixed Capital (Plant and Machinery etc.) and Working Capital (Inventory, creditors and debtors).

  

• Growth typically demands investments in both fixed and working capital requirements. But as investors we are focused on return and one measure of profitability is the Return on Capital Employed (ROCE).

• How can a company increase ROCE:

  1. Increase profit without increasing capital employed

  2. Maintain profit with a decrease in capital employed

• It is generally difficult to change the fixed capital requirements, however, as the industry structure changes or the company’s positioning changes the working capital requirements can decrease.

Framework in Action: Some case studies from the past

• DMart:

  • DMart, one of India’s most successful retail chains, maintains extremely favorable ‘Terms of Trade’ by negotiating long credit cycles with suppliers which has helped it to scale profitably.

  • Customers, however, pay upfront at the stores, ensuring strong cash flows and reducing working capital requirements.

• Zomato (or shall I call Eternal):

  • Collects payments upfront while payments to the suppliers etc. has to be made later.

• Maruti Suzuki:

  • The company maintains strong ‘Terms of Trade’ by securing supplier agreements that extend credit cycles while ensuring upfront payments from dealerships.

• Titan (Luxury Retail):

  • Titan’s favorable ‘Terms of Trade’ stem from a combination of brand strength and effective inventory management. Customers often pre-order high-end watches and jewelry, improving cash flow management.

• Asian Paints (Manufacturing):

  • The company’s unique dealer distribution system ensures payments are received quickly, while supplier agreements allow longer payment cycles.

  • This results in negative working capital, a hallmark of strong ‘Terms of Trade.’

• Nestlé India (Consumer Goods):

  • The company benefits from fast inventory turnover and a strong supplier network that allows it to extend credit while receiving upfront payments from distributors.

Note: These are case studies - not an investment advice

Let’s take the concept of Terms of Trade even further to the concept of float. There are businesses that due to the nature of Industry or competitive positioning enjoys negative working capital which can help fund the fixed capital expenditure.

Float refers to funds that a company holds temporarily but does not own. However, can be leveraged to their advantage.

The most typical example of this concept is Berkshire Hathaway Insurance Operations. Insurance as a business model requires premiums to be prepaid, while claims are settled over time. This delay allows Berkshire Hathaway to use these funds for investments, essentially borrowing money at no cost. Plus: No Fixed Repayment Schedule, No Interest Obligations and No Collateral Requirements.

The ability to generate substantial float often stems from market power, enabling companies to negotiate favorable terms with suppliers and customers. Understanding and leveraging float can significantly enhance a company's financial performance, providing a competitive edge in the marketplace.

The questions that I find worth asking are

1. Is the Industry itself enjoys favorable terms of trade?

Eg, customer facing business like Telecom, Oil Distribution, CGDs where the company is paid upfront but enjoys credit from suppliers.

2. Is the company you are evaluating enjoys relatively better terms of trade than the peers?

3. Does the company have float and is utilizing the float effectively?

Does Adverse Terms of Trade Work?

There are exceptions. Not every company will have favorable terms of trade but still can create huge wealth…why? because they value add and have high margins.

Eg IT services companies have long receivable cycles which get compensated through high profitability. Combine with good growth rates it becomes a recipe for wealth creation.

To sum up

• When terms of trade change from adverse to favorable, the impact on the speed of wealth creation can be significant.

• Having favorable terms of trade does not mean that nothing can go wrong in the industry. Some industries by structure have favorable terms of trade but can still be loss making or giving returns below the cost of capital.

• Nevertheless, Terms of Trade can be a valuable tool in evaluating financial health and long-term sustainability.

  • Short debtor cycles and long creditor cycles: This ensures a company doesn’t lock up too much capital in receivables.

  • Consistently positive cash flows: Businesses that convert their profits into cash efficiently tend to create more shareholder value.

  • Industry trends: Certain industries inherently have better ‘Terms of Trade’ (e.g., FMCG) compared to others (e.g., capital-intensive manufacturing).

  While strong earnings growth and high RoCE are essential, managing working capital efficiently through favorable ‘Terms of Trade’ can be the differentiating factor between a good company and a great one.

  

  ---

  *****

  Invest in yourself…. be a learning machine.

  These communities have helped me learn the nuances of investing. Why not check them out? - Join the community of learners.

  Technofunda Membership

  Join SOIC Membership

  Free Course by Vivek Mashrani (TechnoFunda Investing)

  Free Technofunda Learning

  TradingView Affiliate Link

  Get TradingView Account

  Resources:

  Motilal Oswal 11th Wealth Creation Study

  Flirting with Floats by Prof Sanjay Bakshi Sir

  What I am Reading this Month:

  1. The Almanack Of Naval Ravikant: A Guide to Wealth and Happiness

  2. Never Enough: From Barista to Billionaire

     Finished reading

  Felt like an honest glimpse into the life of a billionaire. Makes you question the purpose of money in our life.

  3. Superagency: Empowering Humanity in the Age of Ai

  Supporting my work

  If you got this far, chances are you find my writing valuable. So please spread the word! Sharing, liking, and commenting all help spread the word!

  Share

  Connect on X @pankajgarg_ciet

  Say Hi 👋

  ---

  Disclaimer: I am not SEBI registered. The information provided here is for informational purposes only. This is not a buy or sell advice. I will not be responsible for any of your profit/loss based on the above information. Consult your financial advisor before making any decisions.

Broader Markets this month

We are certainly in a tough market environment. We have seen days of heightened volatility - Nifty witnessed a range of 6% from top to bottom, while Midcap and small-cap index a range of 13% and 18%. The pain was paramount in individual stocks.

There is a debate in social media about the broader market-oriented approach or stock setup-based approach. In my experience, your own trades and watchlists act as situational awareness tools. The answer to which approach one should lean on depends on the individual. I am not the one to say that only this or that approach is right. I am inclined to find pathways for myself, the ones that I can follow in the long run. Looking at my PnL over the past years, it is clear that I need favorable market conditions to be profitable in my trades. I am not a full-time trader, so I’ve to take into account the time limitations.

On the other hand, these periods provide one of the best investing opportunities.

In periods like this, we appreciate the importance of overall asset allocation. This is a good time to start rebalancing.

In terms of learning and execution, this was one of the best months. Pat on the back to put your thoughts aside and exit with discipline when the stoplosses hit.

The whole account was liquidated in 3-4 days as and when the SL hit. The relatively newer positions were the first to go as they had tight Stoplosses. The last ones to get exited were fairly profitable positions like Zaggle, Zomato and Kaynes.

The best way out is to keep monitoring markets but keep FOMO in check by not participating unless the market structure changes. For trades, it is better to look outside equities for instruments like gold.

This was a very lean month with very little activity after the liquidation, or I can say a very cautious approach.

17th Jan 2025 - Initiated position in Gold (for trading in trend-following portfolio), via Goldbees (33% position)

20th Jan 2025 - Test buy in Genesys. Failed breakout. Exit same day. 0.05% Risk to the portfolio

21st Jan 2025 - 10% Position in Biocon. Why? In pharma shares, any positive news like new approval could decouple from rest of the market. Here after a long time it broke out to new high. An aggressive position with stoploss at previous day low. SL triggered next day with 0.35% loss to portfolio.

29th-01 Feb 2025- SRF

The setup itself is very strong - a big base (see weekly chart below). As we move to a lower timeframe (daily), in this weak overall market it had gapped up on the Highest Volume over 1 year. Supported by triggers like an increase in the price of refrigerant gases.

Here acting on HV1 + Gap setup felt like a good thing to do as there has been a long consolidation of 3+ years and hence the volume footprint is sign of accumulation

01 Feb 2025 - Gold exited with 1% positive impact on the portfolio.

Overall, the month was characterized by a cautious and selective approach. Now the budget event is over and the mandate is for consumption, the idea is to complete the scanning process (1) stocks with strong earnings (2) Stocks with relative strength - the ones that are bucking the downtrend and can emerge as new leaders.

We are treading below EMA 200, which can act as strong resistance. In any case, this is now not an easy environment as we lack our trend filter criteria of Price>EMA 50>EMA 200  

SUM UP

The idea of the post is to sum up thinking in the present without having mind clogged with hindsight. Budget has now given a consumption boost, but will it be able to change the trend remains to be seen.

Time to keep the reading discipline on track. This month I read two books:

1. Focus: The ASML way - Inside the power struggle over the most complex machine on earth

   This book exemplifies how critical ASML is to the global semiconductor industry. How semiconductor supply chains are intertwined and subject to geopolitics 

2. How to Make Money in Stocks: William O’Neil

A classic by William O'Neil. CANSLIM formula 

Leave a comment

*****

Invest in yourself…. be a learning machine.

These communities have helped me learn the nuances of investing. Why not check them out? - Join the community of learners.

Technofunda Membership

Join SOIC Membership

Free Course by Vivek Mashrani (TechnoFunda Investing)

Free Technofunda Learning

TradingView Affiliate Link

Get TradingView Account

Supporting my work

If you got this far, chances are you find my writing valuable. So please spread the word! Sharing, liking, and commenting all help spread the word!

Share

Connect on X @pankajgarg_ciet

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Disclaimer: I am not SEBI registered. The information provided here is for educational purposes only. This is not a buy or sell advice. I will not be responsible for any of your profit/loss based on the above information. Consult your financial advisor before making any decisions.

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