Good morning my dear readers,

Friday, finally can take off the body armour after work today and enjoy the weekend. It's just a crazy market situation.

The govt has got its policy initiatives absolutely correct in many sectors, which has resulted in a massive opportunity for Indian companies.

So it's bittersweet, a good problem to have for people like us (investors)🙂, we need to work double hours but the opportunity is very much available for the investors paying attention..

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The 'Noodle' opportunity.

There used to be a myth that only 1 brand will 'Own' the Noodles market in India.

(The leader will continue to remain the undisputed king, but there is significant room for new players, basically).

India is currently in 'Lift Off' stage, the GDP is expanding pretty soon our economy will cross $10 Trillion.

A lot of myths are going to be busted along the way..

I personally do not think single products can dominate anymore because the opportunity size is expanding rapidly in many categories.

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I recently came to know that a Nepalese noodles company started Indian operations and has touched 800cr in revenue.

(That's a solid achievement in a short duration).

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Hence, we began our hunt to explore possible options in the unlisted space for investment.

Some of the key highlights are,

- The 5rs segment in noodles is set to die.

- Soon, the market is shifting to 10rs & 15rs segment, which will increase margins immensely.

- The demand for Ramen and Korean noodles is 'off the hook' 🪝

(Very high margin categories).

- Most noodles brands factories are running at full capacity.

- The market is big enough for new players as demand growth is excellent, more than what just 1 company can meet.

*This is the feedback from scuttlebutt, the disclaimer is that this data is not verified by any agency.

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As you may have guessed by now, this newsletter is not about 'Noodles' actually.

It is to underline that right from Noodles to Renewables to Defence to EMS to Recycling to Electrical to Hospitality etc, diverse businesses are witnessing market conditions which we have probably never seen before in India.

~~

Whether it's just a passing, temporary cycle or something really special, time will tell.

But my advice to you, it's time to work very hard. These next 10-15 years in India have the potential to be life changing.

(Please allow me the right to be wrong, we are all humans after all).

Let's not waste it on the sidelines.

It's the time to really save, do sip, don't trade nor speculate...but instead, invest in diversified equities as per your risk appetite after consulting your financial advisor.

(Disclaimer: You must know that equities are only for investors who are comfortable with taking HIGH RISK).

~~

Also, I was talking to another unlisted, small company in the Transformer space.

They tell me that they haven't seen a business environment like this in Indian before.

In 2009, they used to visit power companies, begging for orders..

Now, power companies are urging them to set new capacities and saying they will underwrite entity plant's production.

🫣

~~

Honestly speaking, I have lost my sleep, just listening to such comments.

But also, I have seen enough BEARISH cycles to know that investors must focus only on value investing and not get carried away with excitement.

Attractive valuation sometimes is more important than the company itself.

~~

Conclusion:

The opportunity is there, but market is also heated up. Identify sectors that you understand, but ofcourse, one must not over pay for any company.

If you are a part time investor, absolutely best idea is to talk to your investment advisor and invest in ETFs or Mutual funds and do regular SIP.

~~

That is all from me today my friends.

Speaking of Noodles, I really feel like having some spicy noodles this morning for Breakfast now 🤤.

(More than the noodles itself, I love drinking the soup 😀).

#ChildhoodMemories

My Best,

Neil Bahal

Your friendly neighborhood Fund Manager

Negen Capital

Disclaimer: This newsletter is for educational purposes only. While the newsletter discusses just general market insights and past case studies, still, the stock market is a very risky place which can result in losses.

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