Sarthakreturns

  • Strategic Petroleum Reserves (SPR) are stockpiles of crude oil maintained by nations and by private industries as a hedge against potential future energy crises. • The majority of countries other than part of OPEC, such as India, are heavily reliant on oil imports, with India being 82% reliant.  • That is why Strategic Petroleum Reserves (SPR) are required, which are large tanks and storage facilities that store imported oil and are meant to be used in emergencies. • India imports 82% of its oil needs and aims to bring that down to 67% by 2022 by replacing it with local exploration, renewable energy and indigenous ethanol fuel. India was the second top net crude oil (including crude oil products) importer of 205.3 Mt in 2019. • The United States has an oil SPR of 670 million barrels. Given America's fuel requirements, this will suffice for around 70 days of imports. China, which is also a major oil importer, is estimated to have reserves of 500 to 600 million barrels. The ...

Talks of vehicle scrappage policy being introduced come to the surface every few months, but unfortunately, each time policy itself doesn't come to the surface. Nitin Gadkari, Minister for Highway and Transport, has stated that it can be expected to roll out within a month. He termed the policy "very important", let's find out why? With time, things get older and outdated. The same is for cars and technology used in cars, to reduce pollution and fuel consumption. If you live in Bangalore, you must have seen the old cars and buses emitting dirty black smoke. It is because the vehicle is too old. It causes more pollution and consumes more fuel. Now imagine having such trucks, buses, cars, and 2-wheelers on road, all over India. The country has to pay for more fuel plus damage to the environment.  Scrappage policy fixes the maximum number of years, say 20 years, a vehicle can be driven on the road from the date of registration or sets a cut-off on the basis of emission s...

  Strongly recommend the book The Outsiders : Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William Thorndike If the company wants to be successful in the long run the, CEO has to do two things well. A.Optimize the profits of the company b.Invest/Allocate the profits well There are only three ways the companies can raise money. a. Internal Accruals b. Equity c. Debt Only Six things you can do with capital well. A. Invest in the capacity expansion-organic growth B.  M&A C. Pay back the debt D. Pay as dividends E. Repurchase of the share- BuyBack F. Investing in strategic partnerships or establishing cross-shareholdings. Two things to evaluate a CEO’s greatness: 1. The compound annual return to shareholders during his or her tenure and  2. The return over the same period for peer companies and for the broader market (usually measured by the S&P 500). What counts in the long run is the increase in per-share value, not overall growth ...

-They have a 40 % plus EBITDA margin quartz business have the exclusive right to Bretonstone plant in India coming up with a new plant with 500 cr plus Capex - will increase their quartz capacity by 130 %  -Management is confident of utilizing the new plant as well the quartz industry is growing by more than 30 % in the USA.  -Company has 99 % of its revenues from here its product is at a premium to the Chinese players- doesn't compete with them -Due to the new plant company has borrowed more than 400 cr on the balance sheet this number will only go down from here as the CAPEX has been put in place. this high Capex machine and the exclusivity of Breton stone technology shows the entry barrier of the business -The company can easily generate 25 cr cash flows from the existing quartz plant every quarter. with the new plant, we can expect an additional 30- 35 cr cash flow at peak utilization. we will be looking at around 250 cr cash flows from its quartz business every year. -Eve...

-Identify companies with clean accounts -Identify companies with a track record of superior capital allocation -Amongst companies that pass steps 1 & 2 identify those with high barriers to entry