Identifying reputable companies that provide significant returns comparable to well-established firms, using in-depth fundamental research. The primary objective of Fundamental research is to facilitate peer comparison and demonstrate the efficient execution of benchmarking. Despite the limited investment fund, there are countless investment options, possibly numbering in the hundreds or even thousands. It is crucial to identify the most optimal asset from the existing range of potentially favorable investment options. Or alternatively, find a least risky asset with potential to deliver higher returns. Nevertheless, easier said then done.

At Walls research, we intrigued with this puzzle and thus took some time to solve it. Our team has devised a relatively uncomplicated yet highly effective algorithm for assessing the fundamental aspects of a company and assigning a score ranging from 0 to five. Zero being a least or weak performer and five means delivering a highest possible performance in given scenario.

For example, below is the financial performance of leading Indian hospital.

![1708917720403.jpg](https://media.graphassets.com/tF3izphxRmtWTGnDrkjQ)

Determining the superiority between companies, such as Max Health Care and Apollo Hospitals Enterprise Ltd., can be a challenging task. It requires a careful evaluation of various factors, making it both simple and complex at the same time. Assessing their financial standing is a crucial yet arduous process, but the outcome is undeniably worthwhile. However, not everyone possesses the expertise to effectively carry out this analysis.

Following the execution of the algorithm, we have obtained the assessment report, which highlights the financial and operating performance rather than the share price performance or expectation.

![1708925274030.jpg](https://media.graphassets.com/FD5dlAbdQj6iUqqfkMpO)

Based on the assessment and performance, as well as the WR score, it is evident that Max Healthcare is performing well. Following closely behind is Apollo Hospital. So, it takes hardly any time, but one can get a good understanding and can carry out effectively peer benchmarking. Remember, strong fundamental research is foundation of finding strong and positive assets. For further information, kindly leave a message.

Disclaimer: The information provided in this investment research article is for informational purposes only and should not be construed as financial advice. The author and publisher of this article do not assume any responsibility for any investment decisions made based on the information provided herein. Any reliance on the information contained in this article is at the reader's own risk. It's important to consult with a qualified financial advisor or investment professional before making any investment decisions. The author, publisher, and any affiliated parties shall not be liable for any losses, damages, or other liabilities incurred because of the use or misuse of the information provided in this article.

Quick and Effective way to conduct fundamental assessment of companies

WR Team

Profit Margin is a strong KPI’s to find how your business performs and how much profit your business generates. This KPIs also helps to find which products or services aren’t profitable which help to make informed business decisions.
 
Higher Net Profit Margin indicates that the company has successfully managed their costs, implemented the right pricing strategy, and practiced efficient management.
 
Profit Margin = (Net profit / Revenue) x 100
 
Influence of Foreign Exchange increase or decrease:
In emerging markets where interest rates are higher, it is common to observe a devaluation over time. Nevertheless, it can be hard to justify the steep expenses associated with hedging against currency fluctuations when borrowing in these currencies.
 
Effect of interest rate changes in Profitability
 
If Ecommerce firms adopts a floating rate interest approach which is best suited for its business. This is because it earns more money when the economy is growing, and interest rates are rising.
 
How change in Government policy will impact:
Government regulations, subsidies, taxes, and tariffs have a crucial impact on profit margins.
Examples:
Production Linked Incentive benefit will increase 4-6% of sales that cloud increase profit by 30 – 40% (estimated) by considering price advantage over peers.
If Power Tariff has increased by 2%, resulting in a rise in electric charges by an additional 10 to 25 paise per unit. This increase will lead to higher operating expenses.
 
Scenarios 1: A company is incurring net losses, despite reporting positive operating income which concluded that the company has a significant amount of debt.
 
Scenarios 2: In some cases, a company's net income may be higher than its operating income or it may have negative operating income, but it can still have a positive net income. Few reasons will be increase in other sources of income such as investment income, gains from the sale of assets, etc.
 
For Example: A leading Russian technology company’s net income is higher than its operating income.

![1707532591355.jpg](https://media.graphassets.com/1yRQjpb3R92nsSTt5ZJS)

In sum, the net profit margin is a measurable tool used by banks and lenders to assess the risk of providing a loan or credit to a company. Similarly, investors use the profit margin to make comparisons between companies of varying sizes in the same industry.

Profitability is one of the key metrics that determines a company's success.

## CXO Quotes

*“To streamline our renewable business, we are consolidating all renewable companies under Tata Power Renewable Energy Ltd. (TPREL) platform. While some subsidiaries will remain for capital projects, the majority will be integrated into TPREL. This strategic move will ensure efficient management and operation of our renewable business, promoting synergy and cohesion while leveraging the benefits of a unified platform” - DR. PRAVEER SINHA CEO & MD, The Tata Power Company Limited*

### Renewable Energy Landscape in India

Latest data is not accessible. India aims to reach net zero emissions by 2070 and meet 50% of its electricity requirements from renewable energy sources by 2030. The Indian government is continuing to promote the use of renewable energy sources as part of its goal to achieve 500 GW of non-fossil electricity capacity by 2030, with installed generation capacity standing at 416 GW in FY23.

### Tata Power's Contribution to Renewable Energy

Tata Power will be a major contributor to India's renewable energy goals. The company is planning to generate 15 gigawatts of renewable capacity by 2027. The company has signed two major MoUs with Gujarat and Tamil Nadu. In Gujarat State, the company will invest ₹70,000 crores, and in Tamil Nadu State, ₹70,800 crores. The company’s greenfield 4 GW manufacturing facility will become operational in Q4 – FY24.

### Capital Infusion Initiatives

The Company has invested ₹29,500 crores in renewable energy projects. In 2023, the company made 73% of Capex financed through internal accruals and invested ₹4,000 crores in capital infusion into the renewable business by external investors BlackRock and Mubadala. In FY24, the company plans to fund its capex of over ₹12,000 crores primarily from internal accruals.

### Debt Reduction and Loan Options

Tata Power adopted debt-light models through innovative financial engineering and restructuring. Also, favorable legal orders in Andhra Pradesh and government notifications on EMI payments for outstanding dues have helped Tata Power reduce its debt.

Indian companies commonly rely on external commercial borrowing (ECBs) as their primary means of securing financial support from lenders based overseas. Tata Power secured $320 million in sustainability-related loans from Bank of America (2022). The company has received a ₹450 crore "sustainable trade finance facility" from MUFG Bank of Japan to fund its solar projects in Maharashtra and Gujarat in FY23. In September 2023, the company secured $425 million in financing from the US International Development Finance Corporation (DFC) for the newly signed MoU on the Tamil Nadu project.

### Government Initiatives

- PFC and REC have reduced their lending rate to 8.25%, boosting renewable energy.
- 100% Foreign Direct Investment (FDI) is permitted under the automatic route without any prior government approval, allowing foreign firms to own entire power projects.

![0ublpt8n.bmp](https://media.graphassets.com/UagC1zKmT0yZIAX40Igg)

### In Conclusion

India is actively exploring the fastest-growing renewable energy market, which will help Tata Power grow, and these investments will contribute to achieving net-zero goals. 

*For more information, visit [Walls Research](https://www.wallsresearch.com) and subscribe to the latest insights on [Twitter](https://twitter.com/wallsresearch).*

Tata Power: All right elements to become a leader in Power Sector

### AI in Stock Market: Opportunities, Challenges, and Regulatory Landscape


AI is increasingly utilized in the stock market to project stock prices based on historical price movements, financial statements, news articles, and social media sentiment analysis. While AI algorithms can detect trading opportunities and provide data-driven decisions, it's crucial to note that market conditions remain unpredictable, and historical performance does not guarantee future results.

Firms and developers must design AI algorithms carefully and implement robust validation processes to ensure reliability and performance in real-world trading scenarios. Overfitting can lead to false signals and inaccurate predictions, resulting in losses for traders.

### **Market Growth and Trends:**

- Asia Pacific spending on AI is expected to reach $78.4 billion by 2027.

- Professional services hold a 28.5% market share in AI spending in 2023, expected to grow by 22.4% from 2022 to 2027.

- GenAI's contribution to the global GDP is anticipated to be up to $7 trillion by Goldman Sachs Research.

- Algorithmic trading accounts for around 60% to 73% of U.S. equity trading based on Wall Street data.

- Startups in India are entering the market, contributing to a relatively small market size.

### **Analyst Views:**

- SEC Chair Gary Gensler expresses concerns about the potential destabilization of the global financial market if big tech-based trading companies monopolize AI development in the financial sector.

- Tejas Khoday, co-founder and CEO at brokerage Fyers, emphasizes brokerages' focus on using technology to reduce latencies and create fail-safe platforms.

- Sonam Srivastava, founder of Wright Research, notes the reliance on AI for data analysis but suggests that the market is not yet ready for AI to be a standalone factor attracting investors.

### **Regulations for AI-Based Trading:**

- SEC proposes market structure reforms, requiring firms engaged in AI-based trading to disclose their strategies and algorithms.

- SEBI in India is moving towards granular risk-based regulation for entities using AI in 2023.

- ESMA publishes a consultation paper on the impact of MiFID II/MiFIR requirements regarding algorithmic trading.

### **AI-Powered Tools in the Stock Market:**

1. **Jarvis Invest ML Tools:** Provides price projections based on 12 million parameters, experiencing a significant increase in user base.

2. **AnaStrat:** Offers AI-ML post-trade analytics, partnering with Zerodha, Fyers, IIFL, and Dhan to provide its services.

3. **Sigmoidal:** Uses AI to predict capital market behavior and find correlations between assets, with automated trading in securities.

4. **TrendSpider:** An automated technical analysis platform using machine learning algorithms to detect trends and chart patterns.

5. **TradeIdeas:** Offers an AI stock trading bot setup with various investment algorithms and suggests entry and exit signals based on risk management.

In conclusion, the stock market is undergoing a technological shift with the adoption of AI technologies. While AI brings superior analysis and quick insights, regulators must develop a comprehensive framework to control potential misuse, ensuring AI doesn't become the market maker instead of serving common investors.

*For more insights, visit [Walls Research](https://www.wallsresearch.com) and subscribe on [Twitter](https://twitter.com/wallsresearch).*


Will AI be the future of trading? 

According to KPMG and India Mobile Congress, the combined contribution of 5G/6G, Satellite Communication, and Semiconductor industries is projected to reach $240 billion in the next five years, nearly 1.6% of India's GDP by 2028.

### **Driving Factors:**

- India is offering $30 billion in support for semiconductors and related industries.

- The Digital Personal Data Protection (DPDP) Act is expected to boost consumer trust, cross-border trade, and lawful processing, enhancing India’s economy and digital innovation.

- In the semiconductor space, India excels in design engineering and aims to improve its manufacturing. The government has initiated multiple programs, including technology transfer fees.

### **Focus Areas:**

- A highly skilled workforce is required to manage and maintain the complex network infrastructure.

- An effective Partner Ecosystem has to be built between ICT and CSPs players to integrate 5G and other technologies with customer needs.

- Infrastructure providers need to adapt to meet the evolution of 6G, including fiber capacity, optical transport, tower count, 5G repeaters, edge sites, etc. (Currently, about 38% of towers have been fiberized).

- The government is working on new norms and frameworks to secure its 6G and Semiconductor vision. India also tightens foreign investor rules after the Hindenburg report on Adani.

### **Top Telecom Companies and their Investments:**

-  **Jio Platforms:** Builds upon its 5G capabilities through collaboration with the University of Oulu to accelerate 6G research.

-  **Airtel:** Working with ecosystem partners, including chip manufacturers, software, and hardware vendors, to manufacture 5G fixed wireless access (FWA) devices in India.

-  **Vodafone Idea:** Making significant investments to roll out 5G. Partnered with Nokia to accelerate network innovation with 5G-Advanced and 6G in 2022.

-  **BSNL:** Partnered with Tejas Network to deploy a nationwide 4G/5G network in India, with execution planned for 2023 and 2024.


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