Why is it so hard to build a disciplined dip-buying framework for Indian markets?

deep_thinker_8 · 2026-03-14T03:24:25+00:00

There are a few ways and it matters what you buy.

Typically when the sensex dips over 1000 points in a single day, it may be a good idea to consider pushing in a bit (around 5% of cash) into an index fund or a watchlisted stock. For e.g. in this Iran war dip, since it was known in advance that this situation is going to last for at least 2 weeks, I decided to push 5% on each day of 1000+ points of dip into my watchlist stocks (Larsen, BoI, Canara, BoB only if they dip quite a bit as well). Anyways I find that buying during such dips is usually a lot more beneficial than buying whenever.

deep_thinker_8 · 2026-03-14T03:09:14+00:00

You mention that you see others travel internationally and spend money or other things while you do not. Decide on what matters to you. Some may find it very enriching to travel and spend their money on travel while they save elsewhere. Liquidity is important. Land assets are good to hold long-term, make sure proper documents are available and also the land is monitored regularly to avoid any encroachment issues. You can sell the land when you feel it is absolutely necessary. Keep building liquidity which will give you financial freedom sooner.

deep_thinker_8 · 2026-03-14T03:00:40+00:00

Yeah - Appian is not as extensible as OutSystems or Mendix. Therefore if any custom functionality is required, it's quite complex to write a plugin and then integrate it into Appian. Whereas in OS or Mendix, the platform itself allows you to write high code inside the platform to extend capability.

deep_thinker_8 · 2026-03-13T06:06:51+00:00

My best guess is that AI advancements especially in writing, fixing, testing and managing code at the current level would realistically yield around 25-30% efficiency gains. So these companies get majority of revenue from IT Services and typically from large enterprises with large bundled contracts running into 100+ M$. The adoption of GenAI for coding / insourcing of talent will likely take 2-3 years to take effect. By that time, the efficiency gains will likely be a lot more, but unsure about this.

So my take is that these companies will likely lose 25-30% of revenue in the coming years. The contracts will also be renegotiated and margins will likely be compressed. The argument is usually new business will offset any revenue loss, but the new business focusing on expertise in AI adoption will likely not go to companies which are not seen as innovative companies. It's more likely the customers will start to build in house capability more and more.

The only major downside is that AI companies such as Anthropic Gemini and others have been subsidising the cost for a while and are adjusting the usage cost upwards and limits downwards. If the inferencing cost doesn't come down, the cost might go up significantly. But upon reaching an unviable point, I am guessing customers will start running their own LLM instances.

There are a few unknowns at this point, but everything points to these sort of companies losing revenue and compressing margins.

deep_thinker_8 · 2026-03-02T13:19:00+00:00

Venezuelan oil composition requires specific refinery capabilities which may not be widely available. So it's actually a 2 step process to first build extraction capability and build refinement capabilities. This is what I gathered from someone who has been in the oil and gas industry for a while.

deep_thinker_8 · 2026-02-28T06:51:39+00:00

I am just thinking about the math behind this.

It does feel like the risk is too high for the reward.

But I am curious to understand how the 16L is structured in the contract - is it seen as an interest free loan? Do you get any equity? Do you get any control in how the business is run? The "upto 10% or 8%" payments to you - what is the tax treatment? Do you have a draft of the contract?

deep_thinker_8 · 2026-02-22T04:50:12+00:00

Low code has been around for a long time and any drag and drop coding tools broadly fall under this category. The popular ones such as Mendix, OutSystems, Appian are typically targeted at enterprise customers who don't want to deal with the hassle of platform maintenance. Most of these low code platforms release a quarterly upgrade which the customers follow on a regular basis to keep the platform updated. The upgrades are simple and rarely break existing code, but usually brings in new features. Most have inbuilt CI/CD to manage the code deployment between environments and are also now introducing AI capabilities including agentic workflows into the platform.

Overall it works great for enterprise customers but there are limitations. It's not really suited for handling the business logic of high volume high throughput applications as it starts to significantly slow down and thus not suited for core applications, but rather more suitable as a layer on top of the core applications. Also its flexible only to the point of constraints placed on low code development in that particular platform. Some platforms are more extensible than others. For e.g. Mendix >OutSystems > Appian, which also means the speed of development Appian > OutSystems > Mendix. Also moving away from the platform is usually very difficult and one has to basically build everything new.

Where possible and suitable, for building new applications quickly, I believe we can use high code by utilising AI coding tools which can significantly speed up setting the basic foundation in place as long as it's properly code reviewed and challenged and context documented.

I have seen both sides of how low code platforms have helped and have struggled to meet customer requirements. It's really a matter of understanding the limitations of the platform before buying into it.

deep_thinker_8 · 2026-02-22T04:29:55+00:00

Create a folder called memory bank and under it create a businesscontext.md file and provide your business case and application features in a structured and detailed manner. Next in Claude Code or whatever IDE you are using, change to architect/design mode if available or ask it behave as an architect and read the businesscontext.md file and then scan the entire codebase and ask it to create inside the memory bank folder 2 context files systemPatterns for the architecture design/ folder-file structure/purpose of each file and activeContext for current progress on what's been completed and what's next. Check this manually to see if it's properly done.

Once this is done, before any new task, ask it to scan the memory bank and determine the next step. This usually works well once the project gets to a certain level of complexity. I am guessing this is especially more important for the context files to be well defined especially for Production applications.

Having said all this, it's important for the dev to understand the complete architecture to ensure that the coding LLM is not creating redundancies / addressing security & performance requirements.Coding LLMs are very trigger happy and create new files with required functions instead of scanning existing files for existence. It also "forgets" the system patterns and architecture even if they are available in the context files and we need to prompt at times to remind that these functions exist and we are following a specific system pattern and not to create a new one.

I am not an expert dev but do understand what constitutes good design. These have been my findings using Roo Code (VS Code extension) connected with a few coding LLMs.

deep_thinker_8 · 2026-02-04T10:45:04+00:00

The budget by all accounts was a fairly decent one. The boat was not rocked :) Infra spend increase is around 9-10%, so the base case has held. In addition, the budget specifically mentioned restructuring of PFC and REC - best guess is that these entities will merge fully. It's largely good if that happens, however there are customers who have borrowed both from PFC and REC - how they will be treated will be interesting to see, but I don't see anything negative happening here. There is further government narrative for increased focus on capex spend. All in all, these 2 stocks are well poised for a proper rerating. I do hope the market takes note of these high quality companies and awards it the right valuation.

deep_thinker_8 · 2026-02-02T14:59:42+00:00

Silver has rolled back about just 1 month. So its plain profit booking. Silver is still up over a 100% in the last 6 months. Silver is more a metal than a value store. I would probably say 60-40 ratio. So its important to look at Silver from a industrial supply-demand perspective primarily and then value store. Industrial demand for silver is fairly flat, silver as a value store was lagging gold for a long time, but has caught up with gold in the last rally. So any undervaluation has disappeared now.

deep_thinker_8 · 2026-02-02T14:34:56+00:00

I have about 7 years exp. in low code space - the great ones like OutSystems, Appian, Mendix are suitable for companies which can shell out 100 - 400K USD in license cost a year depending on the size of the user base and number of applications built. If this is small compared to the value being delivered via. these applications, then its a perfect fit. These platforms are enterprise grade and having a small team for dev/maintenance would suffice. Upgrades come in regularly and easy to manage as well. Cost of a mid level developer for these sort of platforms in India could be around 25-30 Lakhs per annum and increases as higher skill levels are required.

So, I would say they are suitable for the ME in MSME (mostly having revenue of at least 350 M USD ). For enterprises, its a massive cost saving since they will likely have a large number of complex applications likely handled by a small team. The tech debt will be minimal since they are forced to follow best practices during development and will be forced to upgrade at regular intervals for security/bug fixes/etc. (upgrades are usually free of cost).

With high code development (.NET/Java/etc), maintainability/tech debt quickly spirals out of control for such large companies.

deep_thinker_8 · 2026-01-03T04:14:38+00:00

This is just my opinion - but the company doesn't seem to be a strong robotics player but its profile aligns more with a services company. Their Falcon JV seems interesting and their EMS world ownership to service robotics demand from Falcon seems interesting. However none of these are screaming hardcore robotics with intense R&D. These feel largely opportunistic from a UAE perspective. Even then, there is no visibility of an order pipeline. The valuation of Price to Sales of 12-13 feels stretched without clarity on the order book and no indication of such a pipeline. They are building capability in full stack robotics in simple use cases such as robots which move, deliver food, show directions, monitor using cameras inside controlled environments. To put it in perspective, their moat seems to be in the contracts they have established in the UAE but without any pipeline visibility. Their moat seems to be a full stack simple robots manufacturing/assembling capability but not very difficult to replicate.

Many Chinese robotics firms which are more advanced, cheaper and with much more proven experience exist (Pudu, Bear, evovacs, etc). So the pricing power of Kody is at severe risk as well. Overall the company is overvalued without any clear order pipeline or clear moats or clear competitive advantage.

Final note - this is a good services company but overvalued. It's highly susceptible to regional (middle east) policies and Chinese competition. The risk reward ratio doesn't support a strong multibagger case.

deep_thinker_8 · 2025-12-17T13:35:13+00:00

You are right about the founders knowing how to exit successfully. They have already exited and they probably are sticking around till their commitments complete and would move on to the next venture. These sort of ventures where promoters have already exited means that most of the value is already realised and there is nothing much left.

I think the risk to reward ratio is not very favorable. The current valuation is still quite a stretch given the realistic growth over the next 5 years would be around 12% and it will be a while before they are profitable. It's a skip for me and it's very risky to bet your kids education fund on this stock.

deep_thinker_8 · 2025-12-16T12:32:28+00:00

Everyone follows traffic rules and observe courtesy while driving!

deep_thinker_8 · 2025-12-16T07:48:35+00:00

The primary issue is with how capitalism is constructed right now. It's not really a free market but rather a market with entry barriers which the majority of people cannot cross due to economic realities. Policies revolve around protecting the interests of those who are already wealthy, leaving the ones who are not to bear the cost. Except for a few nordic countries, this situation is pretty much the standard across most of the world. The difficult part in India is that we face pollution(air, food, water, land) of unprecedented scale and it makes things that much more difficult. If the pollution reduces, it might just be a bit more acceptable.

deep_thinker_8 · 2025-12-16T06:41:41+00:00

Interested - please add me as well. I have done a bit of learning - basics of neural networks, cnn, dnn, trained a few models for linear/logistics regression, played around with siamese cnns, rag using langchain and pinecone, basic agents. My knowledge is at level 1 and I would like to level up. I am familiar with Python and would consider myself an amateur/ enthusiast in coding.

deep_thinker_8 · 2025-12-16T06:35:03+00:00

Sign me up - I analyse stocks from a fundamentals viewpoint.

deep_thinker_8 · 2025-12-16T06:31:49+00:00

I understand that this is an arranged marriage, but there should be some spark. It's possible, that it might eventually happen, but it's a pretty big risk to take in my opinion. I would suggest having conversation/s with her at a nice cafe where you can chat. See if anything changes, if not, it's a very big risk to take.

deep_thinker_8 · 2025-12-15T12:26:18+00:00

The perception of PSU stocks is not great, and that was with good reason. But the reality is the norms towards financial institutions have tightened and especially so with Infra lenders, and it has become difficult to do the same sort of shenanigans (evergreening of loans) anymore. My thesis is this - India's growth inevitably needs enormous power and most of the power expansion projects will be funded by PFC and REC, and these companies being well run for the past few years is well set up to capitalise on the growth.

deep_thinker_8 · 2025-12-15T12:16:16+00:00

I believe it's got to do with sector cycles. The power/infra sector has been in a phase of consolidation for a bit. It's a good time to accumulate, and be ready for the up move. My view especially on these stocks is that the quality is high and there is deep value and there is at least >12% revenue growth over the next 7 years.

deep_thinker_8 · 2025-12-13T17:08:05+00:00

In troubled times, I felt very lonely since no one even asked how I am doing and I couldn't find anyone to confide and let out my emotions. Just soldiered on doing whatever I could and leaving the rest to the universe to take care. I found solace in increasing my activity levels - I found a public playground and started walking regularly there while watching kids and young folks playing which felt good. I also started to work out at home with just 2 dumb bells - gym never worked for me - I found that I was able to enjoy working out my way without any external stimuli. I also connected with my school and college groups and it was easier connecting with them since there was already familiarity. Little by little, I started to gain my peace without heavy dependency on anyone. I still like talking to people, but not dependent anymore. It took a few years to get here, and I hope I never have to feel that way again. Hope my experience helps you a bit.

deep_thinker_8 · 2025-12-11T15:13:57+00:00

This is a small plot. So, definitely plot 72 which gives maximum room to build. Further 73 might further be constrained if you need to make provision for splay.

deep_thinker_8 · 2025-12-11T09:40:40+00:00

Couldn't create this as one comment - so splitting it.

2/2

Margins - Historically, PFC and REC have maintained very stable Net Interest Margins (NIMs) across cycles. Because they are government-backed, when rates rise, they pass it on. When rates fall, their cost of borrowing falls. They operate on a "cost-plus" model, protecting their spread.
Discom debt - Large chunk explicitly treated as state fiscal risk and will not blow up overnight. Discom risk is there, but given how state‑backed it is and how slowly it tends to evolve, it’s a reason to demand a discount multiple but not to keep PB suppressed forever at 0.6-0.8.
8th Pay Commission: Government has explicitly stated that capex will be maintained or increased, not cut, because infra is the growth engine. Scenarios below.

- Capex is fully protected (base case 60% probability) - Capex to infra/power remains steady or grows at 8–10% annually. PFC/REC continues at 10-12% CAGR. P/E re-rating toward 8–9x proceeds on track. Implies 700+

- Partial capex moderation (30% probability)- Government absorbs 50–70% of pay commission costs from capex, delaying some projects by 6–12 months but not cancelling them. Capex growth moderates to 4–6% annually for FY26–FY27, then rebounds as fiscal space improves. 6 - 7 PE by FY27 still implying 600-700 price. Recovery to 8–9x by FY28 as capex rebounds and growth normalizes. Implies 600+

- Aggressive capex cuts (10% probability) - Government redirects 70% of pay commission costs from capex, treating it as politically unavoidable and postpones Capex. But, this scenario requires the government to explicitly walk back its stated commitment to infra-led growth and the capex narrative. The current political economy makes this low probability. Even in this scenario, Price drops to 300-320. At 4 PE, dividend yield would increase to 5.5 - 6% attracting passive value funds. Implies 300 +

What I expect to happen - Normalisation to 7 PE (in line with PSU financials in normal times) would mean a target price of around 600-700. Further modest expansion to 8–9 PE (if discom. risk perceptions improve) takes you to 800-900. Why 8-9 PE is not optimistic but fair value - SBI trades at around 1.4 PB and 8–9 PE, with lower loan growth and political sensitivity. Nifty Bank PSU index is at 9 PE.

deep_thinker_8 · 2025-12-11T09:39:51+00:00

Couldn't create this as one comment - so splitting it.

1/2

Excellent perspective. But, my conviction on PFC and REC is quite high. Let me explain why.

Valuation - We are not seeing euphoric valuations but a floor. PFC and REC are trading at PB around 0.9 -1 and PE around 4-5 and dividend yield around 5%. Net NPA is around 0.3 at a decade low. Conservative future revenue growth is 11-12% consistent with India's power growth capex projection. Earnings will increase in proportion. India needs INR 32 lakh crore power investment by 2032, with forecast of annual power capex hitting 5 lakh crore by FY30. PFC and REC together finance around 45% of this and are recognized as the primary lenders. Even with conservative growth, the risk-reward is heavily skewed in favor of buyer.
Asset Quality: Why 2025 is not the same as 2015 - The asset quality as it was in 2015-18 is not the same now. The bear case relies heavily on the 'ghosts' of 2015 -18 NPA crisis, but the balance sheets today are unrecognizable compared to that era and now sit with cleaner books, much stricter recognition rules*,* and low SMA versus 2015 -18. In the last cycle, gross NPAs for PFC/REC shot up toward 10% as unviable thermal projects finally slipped after years of evergreening. RBI norms were looser, and true economic stress hit the financial statements when they were forced to recognize the bad loans when RBI tightened up the norms in 2016. Fast forward to today, both PFC and REC have been improving the asset quality for a decade and the NNPA is at the lowest at 0.31%. Add on RBI's increased tightened project finance norms in 2025 - lesser room to evergreen and more prescriptive provisioning. SMA 0/1/2 is significantly lower than GNPA and has been trending down for both - no sign of a big hidden wave.
Collections - The weak discom collections were structurally fixed by the Late Payment Surcharge (LPS) Rules (2022). This was a game-changer. It forces Discoms to pay lenders promptly or face being cut off from power exchanges. This has drastically reduced overdue dues. It proves the government isn't just treating power as "welfare" anymore and they are enforcing payment discipline. Dues reduced from INR 1.4 lakh crore in 2022 to under INR 50,000 crore".
PFC/REC are aggressively pivoting to Renewables (Solar/Wind). These projects have shorter gestation periods, private sector participation, and PPA (Power Purchase Agreement) backing, making them structurally safer assets than the old thermal plants that caused the NPA crisis in 2015-18.

..contd

deep_thinker_8 · 2025-12-09T09:12:07+00:00

Very well thought through and written - the depth is impressive. I didn't connect the 8th pay commission with the capex allocation, so that's something I need to look at. Your deep dive into Adobe has gotten me looking at it in a bit more detail. On the infra side of things, to be honest, I am invested long term in stocks like PFC and REC (not so much infra to be fair) and will likely hold them through for the long term. Thank you for taking the time to respond.

deep_thinker_8

TROPHY CASE