Aug’22 Hackathon => Buy/ Add/ Sell Framework Techno Funda Hackathon Contents Buy / Add / Sell Framework .......................................................................................................................... 3 Buy ............................................................................................................................................................ 3 Add ............................................................................................................................................................ 3 Sell / Exit.................................................................................................................................................... 3 Implementation Process ............................................................................................................................... 3 Company Selection based on Buy / Add / Sell Framework........................................................................... 4 Cheat Sheet ................................................................................................................................................... 4 Quick Key Factors check for KSB ............................................................................................................... 4 Shareholding Pattern (Screener) .............................................................................................................. 5 Trading View Chart - Highlighted with call outs........................................................................................ 5 Table for Buy Add & Sell ........................................................................................................................... 6 Fundamental Analysis of KSB ........................................................................................................................ 6 Company Overview (Source : Screener) ................................................................................................... 6 Product Offerings (Source : Screener) ...................................................................................................... 6 Revenue Break-up FY20 (Source : Screener) ............................................................................................ 6 Growth Triggers ............................................................................................................................................ 8 4 Cylinder Model Analysis ......................................................................................................................... 9 MACHINE Formula .................................................................................................................................. 10 ICICI Direct Report (Source : Trendline) .................................................................................................. 11 FY23 Results highlights and Analyst Meet Highlights ......................................................................... 12 Other Financials Details as obtained from Screener.in and Tijori .......................................................... 13 P & L Account (Source:Tijori) .............................................................................................................. 13 Cash Flow (Source:Screener) .............................................................................................................. 13 1|Page Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework Revenue Mix (Source:Tijori) ................................................................................................................ 14 Comparison analysis with Peers (Financials) (Source:Tijori) ............................................................... 15 Geographic Location wise breakup (Source: Tijori) ............................................................................ 15 Order book breakup............................................................................................................................ 16 2|Page Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework Buy / Add / Sell Framework Keeping things simple, following is my Buy/ Add/ Sell Framework based on my Understanding from the session. Buy • • Ride winners list filter based on the following criteria:o Trending days maximum (11, 10 or 9) (in a Trending Market) o Weighted RPI more than 100 o ADX more than 25 o RSI 14 above 55 Now, take the first tranche after looking at the trading view chart which must be in stage 2 (must have given breakout with high volume and good big candle, preferable low wicks on the breakout candle) Add • • • • Doing the Fundamental Analysis and looking for earning triggers Applying 4 – Cylinder Model Apply MACHINE formula (preferable in Core portfolio but can be done in Satellite also) Once conviction is built and based on the strong candle and volume take tranches Sell / Exit • • When giving the signal i.e. closing below EMA 21, full exit Will improvise/mix with other EMA’s, partial exit etc. later based on continuous learning Note:• • • Time frame must be same across Buy/ Add/ Sell Framework. So, if Buy is on Weekly timeframe then Add and Sell will also be on Weekly timeframe. Time frame will be decided by Stage Analysis cycle of the sector/company. Implementation Process Ride Winner screening and import to Trading view 1) 2) 3) 4) 5) Login to Ride winners and click on TechnoFunda Price Action Screen Click on Trend option to get the list and download it Apply the Buy filter as aforesaid to select a list of companies with high probability Short listed companies are imported in Trading View Go through the companies one by one to identify the stage 2 3|Page Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework 6) After going through the process, I took KSB as a company to apply the process (refer below screenshot) Company Selection based on Buy / Add / Sell Framework • • • • • • Company Name => KSB Weighted RPI = 134.48 ADX = 57.74 RSI = 75.92 52 Week high = True Trending Days = 11 Cheat Sheet Quick Key Factors check for KSB Sector => Machinery Sub-Sector => Pumps Industry Cycle => Around 5 Years (so I chose weekly timeframe) Market Cap => ₹ 6,762 Cr. Pledge => 0.00 % D/E Ratio => 0.03 ROCE => 21.0 % 4|Page Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework ROE => 15.7 % ATH => ₹ 1,986 (52 Week High also) Shareholding Pattern (Screener) Trading View Chart - Highlighted with call outs 5|Page Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework Table for Buy Add & Sell Date Action Position Comments 28-Jun-21 Buy Tranche 1 Took tracking position based on Buy criteria discussed above 26-Jul-21 Buy Tranche 2 Took second tranche after going through the details of triggers provided below 7-Feb-22 Sell All Sold all based on the Framework (EMA 21) Fundamental Analysis of KSB Company Overview (Source : Screener) KSB Ltd manufactures a range of standard Industrial end suction and high-pressure multistage pumps, submersible motor pumps and mono-block pumps and other value-added parts, for the agricultural, waste-water treatment, energy (nuclear and conventional power), and oil and gas sectors, as well as other industries.[1] Product Offerings (Source : Screener) The company offers a comprehensive range of KSB pumps and valves for various industries. It fulfills demands of customers present in water, energy, agriculture, construction, Oil & Gas, and process Industries. It also offers services & spare parts and training for O&M of its pumps & valves.[1] Revenue Break-up FY20 (Source : Screener) By Segment :Pump and related spares - 83%, Valves and related spares - 17% [2] By Geography :Domestic sales: 80% Overseas sales 20% [3] Market Share The company has a market share of ~7.5% in the domestic pumps and valves industry.[4] Manufacturing Facilities The product range of KSB pumps and valves are manufactured from the facilities of KSB Pumps Limited spread over six centres in India at Pimpri, Chinchwad, Khandala, Vambori, Sinnar and Coimbatore. [5] 6|Page Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework Distribution Network The company has a wide distribution network of 4 zonal offices, 5 service stations, 16 branch offices, 21 go-downs, 200+ authorized service centers and 1,000+ authorized dealers across India.[5] Order Book The company had an outstanding order book of Rs. 1,414 crore as on September 30, 2020 [6] Future Plans The company focuses on strengthening its product range in refinery and petrochemical, water handling, building services segments. Based on the growing needs of FGD power plants, it will continue to develop new hydraulics and sizes to cater to market needs. [7] Parent Company Co. is a 40.5% subsidiary of a German company, KSB SE & Co. KGaA. The company gets technological support from its parent company which is based in Germany, it is focused on research and development (R&D) and has been successful in developing technologically advanced designs for both standard and engineered pumps.[8][9] 7|Page Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework Growth Triggers Overview (excerpts taken from ICICI Direct Report):• New and Repeat Orders • New Product Launch • Govt. Infrastructure push and in other sectors like Petrochemical, Defence, Housing, Construction etc. • Good Market Share 8|Page Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework 4 Cylinder Model Analysis Note:- 4 cylinder model is supported by following data in subsequent sections 1) Sales Growth (Source : Screener) 2) Operating Leverage (source : Tijori) 3) Margin Expansion (please refer above two points) 4) Debt (Source:Screener) 9|Page Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework MACHINE Formula Megatrend/Emerging trend • Sector tailwinds is there as Govt push is there for infrastructure, defence etc. They see a strong opportunity for process pumps in next 3-5 years. Action • • Price Volume Action Institutional Buying Competitive Advantages • • In some pump sector having market share around 70% KSB is pre-qualified for supplying primary coolant pumps to the NPCIL (Nuclear Power Corporation of India) High ROCE • Around 20% (> 15%) Improvement • • Branding Capex is done New • New product is launched (Aqua pump) Execution of Earnings Growth Triggers • Company is working on that based on the conference call 10 | P a g e Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework ICICI Direct Report (Source : Trendline) 11 | P a g e Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework FY23 Results highlights and Analyst Meet Highlights 12 | P a g e Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework Other Financials Details as obtained from Screener.in and Tijori P & L Account (Source:Tijori) Cash Flow (Source:Screener) 13 | P a g e Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework Revenue Mix (Source:Tijori) 14 | P a g e Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework Comparison analysis with Peers (Financials) (Source:Tijori) Geographic Location wise breakup (Source: Tijori) 15 | P a g e Suvendu Kumar Paul (Team #16 Member) Aug’22 Hackathon => Buy/ Add/ Sell Framework Order book breakup 16 | P a g e Suvendu Kumar Paul (Team #16 Member)
