UltraTech: Stock Review (2020)

Why UltraTech Cement?

Two reasons.

One, it gives us a level playing field.

You see, I don’t know anything about UltraTech, at the time of first writing this…

So, we will do it step by step.

Properly.

With a familiar stock, I might foolishly skip steps.

Which defeats the purpose of your joining us today.

With UltraTech, we’ll be looking with fresh eyes.

And, the second reason goes to the heart of an important question:

How to get investment ideas?

Three ways.

First, is using your personal edge. Second is cold screening. And the third is scanning a sector.

This review falls into the third category.

Basically, we want to look at stocks in a bunch, so that there is some overlap in the work.

So, it’s a good idea to go through stocks, sector-wise.

And what’s the best place to start?

That’s right. Begin with a leading player in the sector.

So, if cement, then UltraTech.

Okay.

The next question is:

What are the steps involved?

First, we’ll get an overview of the company.

You know:

Which products, how much sales, where are plants located, promoters, parent, subsidiaries, capital structure.

That kind of thing.

In the next step, we’ll try and gather some idea about its operating characteristics.

Things like units/volumes, capacity, utilization levels and so on.

It’s a really good idea to get these numbers (and they’re not always available), because you then get a good feel for the company.

The third step is diving into the qualitative information.

Basically, what advantages it enjoys over its competitors. And will that last?

The next step is valuation.

We look at the financial statements, and use them as a springboard to arrive at the true worth of the stock.

And finally, we’ll tie up everything together and arrive at a conclusion.

Your thoughts…

Here’s my first question for you:

Of the three ways to generate investment ideas, which one appeals to you the most?

Have you tried it in the past?

Also, is there any other method you use?

6 thoughts on “UltraTech: Stock Review (2020)”

  1. Firstly, Thanks a lot sir for this !!

    Now coming to the point, it was way beautiful for me when I listened to your plans. And with this, It will immensely benefit to all of us in a beautiful way. Of course, I will try to learn and gain maximum from this stock review and all.

    Once again, thanks for helping.

    Also, let me know about investing and connecting to the investing community though any medium, Be it digital or what ever. If any more designated place or social media or anything like this for the learning investors, I would surely love to be a part of it. It will surely help me and I will learn dedicatedly.

    With lots of love
    Akash

    1. Hi Akash,

      Many thanks for the kind words! Made my day!!

      We’ll definitely go through all the steps of this stock review as planned. It’s a lot of work. But I’ll put in the required time and energy towards it. So, stay tuned.

      Also, Akash, as of now, I’m not active on any other platform, so the best way to reach out is right here…

      Look forward to your participation!

      Warm regards,
      Satya

  2. Dear Satya,

    I have a question. Why have you chosen a cyclical sector? Is it because the valuations are relatively favourable during a downturn?

    Regards
    Venkatesh

    1. Hi Venkatesh,

      A couple of points:

      First. Like I mentioned, I wanted a clean slate so that we can work through the entire process without my biases coming in the way.

      Second. One of the things any investor must try and do is go through as many companies as possible. A good way is to go at it sector by sector. And since, I don’t know much about the cement sector, it’s high time I did the work.

      Third. You’re right, given the state of the Indian economy, sectors like auto, metals, cement etc. would be good places to look at. So why not do the work here?

      Does that answer your question, Venkatesh?

      Warm regards,
      Satya

  3. Dear Satya,

    I have zero knowledge in analysis, only know basics to invest and how to trade. Can I understand things in this forum? Sorry for the basic question.

    K.Sureshkumar

    1. Hi Suresh,

      First of all, your question is most welcome!

      And, yes, I’ll definitely try and keep things simple here so that it is easy to follow. So, don’t worry on that font.

      And if, even then, you are unable to follow something, please don’t hesitate to post a query… I’ll be happy to help!

      Warm regards,
      Satya

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