Vaibhav Joshi

As I received a good response, here you go My Diwali Picks 🎇 1. Satin Creditcare 2. Raymond Realty 3. Sammaan Capital 4. P N Gadgil Jewellers These are not direct buy/sell recommendations. Just four companies where I believe the risk-reward looks interesting and which have the potential to perform well over the next 12 months. Two Special Mentions 👀 1. Prime Cables 2. Purple United Kids Both are SME companies, so please be VERY careful. SME stocks carry significantly higher risks, liquidity constraints and volatility. Things can change quickly, so position sizing and risk management are extremely important. Would be interesting to revisit this post next Diwali and see how these picks have performed. Let's see how this plays out! 😊

May your wealth compound, your conviction stay strong, and your portfolio shine brighter every year. 🪔 Wishing everyone a prosperous and Happy Diwali! ✨

@grok remind this tweet on next diwali and see how these bets performed in one year from now.

One Point One Solutions: Interesting opportunity emerging, but execution will be key. The business is moving beyond traditional BPM into AI-led enterprise solutions, and Q2 execution is encouraging. Revenue reached ₹175 Cr, EBITDA ₹45.3 Cr with margins at 25.9%. Management believes the current run rate is sustainable and is targeting 15–20% organic growth in FY28. What makes the opportunity interesting? • Multiple multi-year enterprise contract wins, including a $10.8 Mn Costa Rica deal. • 14 ResolvX deployments across 7 enterprise clients in just five months. • AI integration into existing BPM contracts could drive productivity and margin expansion. • Outcome-based pricing gives ResolvX an opportunity to scale with customer transaction volumes. The opportunity is not just about growing the BPM business. It is about gradually improving the quality of revenues through technology and AI. However, a few things need monitoring: ₹80+ Cr of CWIP is sitting on the balance sheet. These investments need to translate into commercial revenue. ResolvX's revenue contribution is still undisclosed. Cash flow generation needs to keep pace with reported earnings. Acquisition-related debt and future acquisitions need to be monitored. Current EBITDA margins are around 25–26%. Significant expansion is still some time away. Valuation is where things get interesting, but I would be careful about assigning a premium AI valuation before standalone AI revenues become visible. At 15–20% organic growth, stable margins and potential operating leverage from AI, the earnings opportunity looks attractive. My takeaway: The business transformation is promising, and the next 2–3 quarters will be crucial. I would track organic growth, cash conversion and AI monetisation before getting too aggressive with valuation assumptions.

UGRO Capital Q2 FY27: Cheap valuations, but I would still prefer to wait. There are positives: • Disbursements up 77% YoY to ₹3,159 Cr. • AUM at ₹15,019 Cr, up 23%. • Operating expenses down from ₹205 Cr in Q4 FY26 to ₹127 Cr. • Emerging Market LAP and GROx now contribute 53% of AUM. But there are concerns too. Credit cost increased to ₹87 Cr from ₹66 Cr QoQ, while GNPA edged up to 2.7%. Finance costs are also growing faster than net total income. Asset quality needs to stabilise. The legacy co-lending model is another important issue. Between FY22 and FY26, UGRO reversed ₹318 Cr of previously recognised income, equivalent to 44% of cumulative PBT. Early loan repayments were resulting in reversals of upfront NPV income. The Profectus merger addresses this accounting issue by shifting spread recognition to expected behavioural loan tenure. For H1 FY27: • PAT increases from ₹118.6 Cr to ₹126.3 Cr on a pro forma basis. • Income reversals reduce from ₹120.5 Cr to approximately ₹58 Cr. • Adjusted net worth falls from ₹3,029 Cr to ₹2,454 Cr, or ₹158/share, after goodwill, acquisition costs and spread remeasurement. • Capital adequacy improves from 18.8% to approximately 22% on a pro forma basis. The merger is still awaiting final NCLT approval. The reported numbers will be restated after approval, so historical comparisons need caution. What is management guiding for? • Emerging Market LAP growth of 25–30%. • GROx growth of 35–40%. • Focus businesses to contribute 85–87% of AUM by FY29. • Annual operating costs of approximately ₹490 Cr in FY27, against ₹205 Cr quarterly in Q4 FY26. • ROA target of 3–3.5% by FY29, against 2.7% H1 pro forma ROA. • No fresh equity raise planned for the next 3 years. Management is also targeting 80–85 lakh monthly disbursements per branch as the existing LAP network matures. However, funding costs deserve monitoring. Around 50% of borrowings are floating-rate, and management expects a potential 15–20 bps impact from rate hikes. Valuations are undoubtedly super cheap after the brutal correction. But I don't see the need to rush. I would prefer either: The stock crosses its 200 DMA and consolidates for a while, indicating some stability. We see another brutal leg of correction, but accompanied by a meaningful improvement in business fundamentals. I want to see AUM growth accelerate, credit costs moderate, asset quality stabilise and the new business model deliver consistent returns. There is a potentially interesting business transition happening here, but execution still needs to be demonstrated. Cheap valuations are attractive. Confirmation in the numbers and price action matters more at this stage.

Don't feel FOMO and rush to switch to largecaps or the Nifty. Remember, nothing has fundamentally changed. Smallcaps and microcaps are still likely to grow faster and eventually outperform the broader indices. The recent rally is largely driven by FIIs deploying capital. Once this stabilises, domestic investors, HNIs and family offices will gradually start chasing growth companies again, especially where valuations remain relatively reasonable. Don't change your investment strategy just because of one strong week in largecaps. Apart from financials and a handful of other names, I honestly don't find many attractive opportunities in the largecap space right now.

One can start looking at cable companies after this correction. The demand for transmission infrastructure is not just about data centres. In fact, data centres account for a relatively small portion of the overall opportunity. Any country looking to increase manufacturing's contribution to GDP needs massive investments in power generation and transmission. India's rising energy consumption and transmission capex plans clearly reflect this structural trend. With huge transmission capex lined up, demand visibility is strong. If copper prices stabilise, it could provide further relief to margins. Valuations have become reasonable, and I believe we are somewhere in the middle of this cycle, with plenty of growth still left to play out. My personal bets are on Paramount Communications, Prime Cable and Delton Cables. These stocks have already delivered good returns, but I still believe there is considerable upside potential. The earnings visibility remains strong, and I don't think the opportunity has fully played out yet.

Purple United (H1 FY27): Strong growth, but a few things to watch. Revenue grew 104% YoY to ₹124 Cr, EBITDA increased 92% to ₹24.7 Cr PAT grew 60% to ₹8.1 Cr. A few observations: • Revenue has more than doubled, reflecting strong business momentum. • EBITDA margins moderated from 21.2% to 19.9%. This needs attention. • Working capital absorption led to negative operating cash flow of ₹11.7 Cr. • Borrowings increased to ₹150 Cr, taking net debt to approximately ₹125 Cr. The negative cash flow needs to be viewed in the context of rapid expansion. Valuation-wise, the results look fine. However, the bigger question is how management plans to sustain growth, manage margins and working capital through H2. Let's attend the concall for more clarity, particularly on margin trajectory, expansion plans and debt levels. H1 looks encouraging. H2 execution will be important.

I feel smallcaps and microcaps will rally with a slight delay. When markets corrected, many HNIs, family offices and retail investors either exited or partially booked profits, hoping to re-enter at much lower levels. Then came the positive news, and FIIs started buying aggressively. However, a lot of domestic investors are still sceptical, wondering whether this is just another bull trap. As a result, they are still sitting on the sidelines. Once this rally stabilises and HNIs start identifying the leaders of the next leg, I believe capital will gradually start flowing back into small and microcaps. Those who sold earlier could eventually fuel the rally further as they rush to re-enter, potentially creating FOMO. These are just my personal opinions. Let's see how it plays out.

This is the first time I have seen FIIs buying like there is no tomorrow.

As FIIs load up on banks and financial services, look out for turnaround NBFCs; they might perform a little late, but it is likely that good money will be made in those pockets.

Retailers continue to doubt and FIIs are covering their shorts.

The one-way rally in Nifty 50 looks surreal 🔥

Muthoot Microfin posted best credit cost in last 9 quarters and expects it to further improve in H2. Good set of numbers as AUM will increase operating leverage will play out and earnings will grow even faster 🔥

What a crazy turnaround from there 🤞

PAT at 110 cr