Why UltraTech Cement?
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.
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?
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.
The next question is:
What are the steps involved?
First, we’ll get an overview of the company.
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.
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?