Jalaj

Trying to make sense of markets

[Prabhakar Kudva @prabhakarkudva]

Two golden skills in the post AI world:

1. filter
2. focus

[Ankush Datar @ankushd14]

What a line.

[Ernest Wong @ErnestWongBWM]

This chart has never been more relevant, though may need to add something for "1 Day"

[Jalaj @manochaj]

@vijaimantrimf How did you reach to conclusion that 42bps yield I lower, across how many mfds is this spread across?

Any guesses how much yield do amcs make for the value they add?

MFD earns until the invested amount is booked, so it’s an annuity income and costs don’t move along

[Jalaj @manochaj]

@anku_chahar Delulu

[Brandon Beylo @marketplunger1]

Focus on Supply Rather Than Demand

Anyone interested in commodity/hard asset investing should print this paragraph and frame it on their desk.

Source: Capital Returns

[Jalaj @manochaj]

@equities_samjho How large is the defence business? And what capabilities does it have in defence?

[Jalaj @manochaj]

@PandaGallery_ @MunCorpGurugram It’s a road that passes via a pond 😅

[Jalaj @manochaj]

@InvestorOfJAMMU Sir this is the 4th quarter result, fy26 ke 3 quarter phele nikal chuke hai, too back of envelop calculation told growth was not coming. Why would investors be spooked with one quarter?

[Akshay Jogani @kshayjogani]

India now has three operational semiconductor backend facilities in a single industrial cluster, and a 28nm wafer fab under construction nearby. Two years ago, it had zero. Whatever else you want to say about the India Semiconductor Mission, the pace of execution on the ground has outrun most expectations.

The economics of OSAT are what make this interesting. Globally, this is a brutal business. Amkor, the world's second-largest OSAT with $6.5 billion in annual revenue, runs operating margins around 7-9% and has historically struggled to earn its cost of capital. ASE, the largest, does a bit better but still operates with low ROICs.

The reason is structural: packaging is capital-intensive, commoditizing in mature nodes, and customers have leverage because they can shift volumes between OSATs. So when India subsidizes 50% of Kaynes' Rs 3,300 crore capex, what it's really doing is halving the capital burden and making an otherwise mediocre-ROIC business generate decent returns on the company's actual capital deployed.

The entire capacity is pre-booked under five-year offtake agreements with AOS, Infineon, and Fujitsu. Government bears half the capex risk, global MNCs get a diversified supply node, Kaynes gets a business that works on half the invested capital.

Everyone's incentives are aligned, and that's exactly how Malaysia and Thailand built their OSAT industries starting in the 1970s. You can't leapfrog into wafer fabrication, equipment manufacturing, or design IP without first proving you can run a backend facility at global quality standards and deliver on time. The subsidy-funded OSAT phase is the cost of building institutional muscle, training thousands of engineers in cleanroom discipline, and earning credibility with the same global customers who will eventually place fab and advanced packaging orders. Almost every country that matters in semiconductors today went through this phase, and India is now in it.

Excited for what lies ahead. Credit to the entrepreneurs willing to take the kind of risk our country needs them to take right now, and to the government for structuring the economics in a way that lets Indian companies come from behind and compete. The goal isn't just to run packaging lines for the world. It's to eventually make India a semiconductor powerhouse. That journey has started!!

[Jalaj @manochaj]

@GauravGupta_RE Incentives drive actions and tweets 😊

[Jalaj @manochaj]

@AdityaKhemka5 During BFBV course always thought why so much focus on behavioural part. The more time i have spent in markets, realised behavioural edge decides the outcome more than analytical/ information. Analytical edge can be mastered, behavioural takes a lot more effort!

[Jalaj @manochaj]

@leading_nowhere Epc and IT ka kya lena dena?

[Jalaj @manochaj]

@suru27 It makes so much sense to track supply side.

We have been wired to look at demand side, supply on the other hand can be tracked and utilisation rates help understand where are we on next capex cycle and roes moving..

[Jalaj @manochaj]

@logical_traderr So there is no way to think/cross validate guidance?

If it were so simple, then simply ask managements for guidance, build in and take decisons..

[Jalaj @manochaj]

@flexifinHQ @LearningEleven @Paytm There are companies who are manufacturing sb in India, chips are still being imported. It has graduated from import to assembly.

There was noise around rbi banning importer sb because payments infra is exposed to Chinese chips, didn’t happen though

[Jalaj @manochaj]

@ahmed_madha @sanjaylangval Has happened in power utilities now. Used to be valued at EVEBITDA, now going to p/b

[Jalaj @manochaj]

@EquityValueIn Some part of value chain might be oligopolistic and others fragmented, so easier to find winners at concentrated pools

[Jalaj @manochaj]

@amitandon You and your belongings are truly global citizen