Shuchi Nahar's Weekend Blog! : Ethanol - Demand, Market Size, Opportunities & New Government Policies https://t.co/ehAP1CNsiM
#ethanol #fermentation #chemical

In a business where the buying & selling price is fixed by the government, how is that the sugar stocks are rallying so much?

A thread 🧵 to learn how the sugar sector works. Do re-tweet and hence us educate more investors (1/n)

- Sugar is made out of Sugarcane
- The government fixes buying price (FRP – Fair & Remunerative price) for the mill from the farmers at 2.850/Kg
- Selling price is also fixed at Rs. 31/Kg (MSP – Minimum selling price) (2/n)

Lets understand the sector,

- Sugarcane purchased by the mill is crushed to remove the juice (exactly like you have sugarcane juice at a hotel)
- Juice is heated & boiled to remove sugar (3/n)

- The juice can be boiled upto 3 times to remove sugar. Each time it is boiled, sugar is removed, than some water is added and boiled again to remove more sugar (4/n)

- There are 2 by-products as well. The residue left behind after the boiling process is over is like a gum/paste called molasses & the fiber/stem of the sugarcane after juice is extracted (5/n)

For almost seven years, I have tracked the hotels space very closely.

While everyone wants to jump on the 'unlock trade' bandwagon, I do not feel it's a great idea because the business model in itself is a little flawed.

Here's a thread 👇 (1/n)

Let's first start with the industry overview.
The whole industry works on one and one thing only. Revenues. (Let's call this A)

Are you capable of charging higher Revenues from your customers on a regular basis?

Are you able to maintain your Revenues if not increase them? (2/n)

Why is this relevant?
Well, think of a regular business selling goods / services.
Typically, when you're not able to sell something, you keep it for the next day or hold it in your 'inventory'.
Typically you have a certain level of demand estimation before you manufacture(3/n)

Whether you manufacture a product or sell a service, you do a certain degree of demand planning.

In the context of hotels, this would be based on the location, the demand of tourist arrivals and accordingly the number of keys (hotel rooms).

(4/n)

The only catch here is the fact that you only have a 24 hour window to sell a day's inventory.

Taj Mahal Palace in Mumbai only has a 24 hour window on a daily basis to sell 560 room nights.

Once the day gets expired, the inventory is gone. (5/n)

Learn about the STEEL SECTOR in this thread

The demand for steel is generally only 1.2 times the GDP & there is no significant growth in our GDP but still the sector has rallied relentlessly, lets try & understand

Do ‘re-tweet’ & help us educate more investors (1/22)
#Investing

The metal sector is broadly divided into 2,
-Ferrous is a category of metal that has Iron in it, Steel as an example
-Non-Ferrous is a metal, which does not have Iron content, Aluminum, copper, lead, nickel, Zinc etc.
This thread focuses on Ferrous & hence Steel (2/22)

To start, lets understand with how steel is made (its important).
Iron ore is mined, it is then first converted to Iron & Iron is then converted to Steel. There are 3 processes of making steel
-Blast Furnace
-Scrap Metal
-DRIP/Sponge
We will discuss all three (3/22)

After writing on Banking & Paints, this thread focuses on the 'Logistic Sector'. Idea is to give a small start to the retail investors looking at investing in this space from where they can build on.

This thread covers,
- Macro
- Business Model
- 3PL & 4PL
- Valuation (1/n)

Logistics business macro

-14% of India’s GDP is spent on Logistic
-Organized market is 42%
-Growing at 10-15%
-Employs 2.2 cr
-Achieved Infrastructure status
-FY 14-18 attracted 1,00,000 cr FDI (2/n)

What’s the business?

Logistic is traditionally seen as a warehousing & transportation business where goods, needs 2b transported 4m point A to B using Road, Rail, Ship or Air & can be stored at multiple warehouses before the consumer receives the product (3/n)

The business landscape is changing fast with newer competition and technology is challenging the older business models. 3PL (3rd party logistics) & 4PL is one such change in the business of logistics, will discuss about the same ahead. (4/n)

Listed companies involved in the business may or largely may not own the Trucks, Rails, Aircraft, Ships, Warehouses etc., but uses outsourced services of other vendors and the listed companies manage the logistics from point A to point B (5/n)

(Thread) With Kotak launching its International REIT Fund of Fund NFO, it is worth revisiting our old thread on Real Estate Investment Trust (#REIT). The Idea is to educate readers on REIT & share our view on the Kotak #NFO

Do ‘re-tweet’ & help us educate more investors (1/n)

What’s a REIT?

Lets say I am a RE developer, K Raheja. I like a land in Mumbai & Hyderabad 4 some commercial development. I decide to buy it. Where will I get the monies 2 buy & construct it?
1. Self
2. Bank, NBFC, MF - Debt
3. Partner – someone else investing as Equity (2/n)

So I invest some monies, got some 4m banks & MF’s & I also got Blackrock to invest 2 buy the land & make the business park called 'Mindspace'. I constructed around 23-mn sq ft with multiple building & I started leasing them out to companies who wanted rented office premises (3/n)

There comes a point where I needed more monies to build new building, pay off the loans etc., where do I get the monies? So I decide to do an #IPO. Not of the entire company K Raheja but only this project called Mindspace. So I formed a trust or corporation (4/n)

I commit to payout 90% of my rent income to the shareholders proportionately as dividends & I will use this IPO money to invest a minimum 80% in completed real estate, which is generating rent & will use 20% in constructing new Real Estate or lend to some other developer (5/n)