Death A Contemplation: Of Time and Fabric of Life

(Earlier I started this series to try to contemplate death from the data and phenomenon we encounter in our real life free from the burden of religion and scriptures. I posted last post (4^th part) in 2015 but ever since regularly receiving requests to continue the same. So I am trying to bring some more perspectives. But please bear in mind that I am nothing and these are just my views…(phantasm)

(Click here for earlier posts)

Whether life is really as complex as it seems or whether it should have been as complex as we have made it? One of my very religious friend (he thinks so) once was telling me the value of religion because without it people may not be having any awareness about God. That friend is one of those who think that wearing a uniform and doing worship is religion. Religion for them is a belief not an experience...a part of their being. Just like Bravery (or fearlessness)- can someone say that he "believes" in bravery? No... because Bravery is an experience, a part of our being...it is a manifestation of our innate being/character because by believing alone one can't live his life like a warrior. Simialrly, Religion is not just a belief but a thirst, a yearning to know, experience and understand what we are and this life and then we just transform and transcend into higher dimensions. Religion enters into our life for the first time when we realize the uselessness and shallowness of our joy, social and physical achievements because death will end all this without much effort…when we realize music fills us more than food.

I told him that truth is not a subject…not a linear path which we need to follow by reading scriptures…in fact truth is multi-dimensional and everywhere…right in front of our eyes…no need to look up to the sky all the time. Proof of a supreme power is everywhere….in fact GOD is looking straight into our eyes….right now.

The Fabric of Life: GOD is looking straight into our eyes

Our bodies are made of atoms which have nothing in them but just empty space. If we remove all the empty space in all the atoms of our bodies the resultant thing will be invisible even under microscope. In fact the size of entire human population without space is smaller than a sugar cube. So it simply means we are not physical and we feel ourselves, consciousness not at physical level but at non-physical level (Spiritual). If we can see that our bodies are only vacant space then doors of spirituality starts opening without any sort of religious baptism or rituals. And we can see the bridge connecting science with religion. So our body does not contain our spirit….we are just a spirit…consciousness. And in fact this is shocking why we need the evidence from scriptures, wordy assurance of a so called Guru (who asks others only to believe his words and all ends there). And when we realize this fact then we find all our fears fading away and we find our consciousness spreading vast and this experience is what we regard as spiritual experiences…similar to what our old Sages felt when they attained that state of mind.

That's why fearlessness is the first sign (may be the only one...all else like compassion, Non-attachment etc. are just its expansions) of religion because most of our fears are attached with death so when we are not a body but pure energy, consiousness then all fears, limitations attached with our physical existence fade away. That's why we can see our Gurus accepting death just like morning tea...no fear, no grief or sense of loosing something because they know death is not a barrier but a bridge. Just see our today's so called Gurus...can we see any spark of fearlessness in their eyes?

Our DNA carries the genetic instructions for the development, functioning, growth and reproduction of all known organisms. DNA contains the information about progression of life. Before the advent of DNA, our life was thought of an outcome of some very complex chemical reactions and then Darwin happened to further explain the evolution. But DNA proved that life follows a coded path or information in cells. But nobody could prove the origin of this “Information” in DNA. Just as “1” and “0” (binary codes) acts as the characters to write a code in our computer softwares similarly there are four different chemicals (proteins) shown as A, T, G, and C which function just like our machine codes. The length of this DNA in every cell of our body is staggering 3 billion words long!!! Also, 99.9% of our DNA is similar to all other human beings and my uniqueness is defined by the fractional difference in how those three billion letters are sequenced in our cells.

Our DNA is not our regular matter or energy but they are information processing centers. Information is not an outcome of natural chaos like a pattern of clouds which may resemble a human face. Information is a creation and is always created by intelligence beings just like our computer program. We can see some random alphabet in the pattern of clouds but what if we see a long pattern of clouds resembling   “HCG Ltd is valued at 10 times its EBITDA while others are valued 20 times EBITDA”. This line is not a pattern but this is a complex set of information and it is not possible that it can be formed randomly by natural chaos. And our DNA is complex beyond imagination spanning 3 billion words in every cell in every living being. This only means that it is the creation of some superior being like God….intelligent design.

The Fibonacci series where every successive number is a sum total of preceding two numbers (1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 . . .). Remarkably whole nature is built on the basis of this series. It is nature’s way of perfect design. This Divine Proportion is the division of a given unit of length into two parts such that the ratio of the shorter to the longer equals the ratio of the longer part to the whole or, when a line is divided such that the ratio of the longer part of the line to the whole is exactly the same ratio as the shorter part of the line is to the longer part. This ratio is golden mean or phi, which is approximately 1.61803. The higher you go in the Fibonacci sequence, the more closely the ratio between two successive numbers in the sequence approximates phi.

Everything in the universe seem to be following this design- petals of flowers, our DNA, tree branches, Galaxies, seed patterns of sunflowers Anything built on the basis of this ratio look perfect and beautiful. The most amazing fact is that the information to produce spirals, leaves and numbers in living things in this pattern is stored in the DNA. When the master programmer (GOD) was busy in the creation of life…space, matter and DNA created the basic material but he needed the life to follow a particular pattern, design otherwise the things would fall in places as the petals of flowers could grow anywhere and self-destruct so he created a perfect design also which we know as Divine proportion or Golden mean or Fibonacci series. Flowers of a tree can fall onto the ground in any pattern but their physical demonstration is reflected in Divine proportion.

Shapes proportioned according to the golden ratio have long been considered aesthetically pleasing throughout many cultures, and is still used frequently in art and design, suggesting a natural balance between symmetry and asymmetry. Gize pyramids are also based on this ratio, Artists like Leonardo Da Vinci, Van Gogh used this ratio extensively in their artwork, so as many other artists from ancient Greece and Egypt in many of their artworks.

There are a number of such evidences which are spread all around us which point towards some Supreme Being as the creative force behind all this. This Supreme Being the GOD first of all created the basic material which I call Fabric of life- and then he weaved life with all its features like DNA, Space (ether), birth, growth, time and death.

Who understands this Fabric of Life

And there are fellows who have the knowledge of this Fabric of life, its composition and origin. We call and regard these fellows as Deities or sages. As they understand the Fabric of life so they have the capability to manipulate or redesign the same- acts which we regard as miracles.

Here I remember something- it was perhaps in the year 2001 when my cousin brother gave me a computer game named “Future cop” where a Robotic cop accomplishes missions killing and destroying enemies and enemy posts. If the cop is killed then game is over. It took quite an effort from me to complete various levels of that game as many times the Cop was killed midway in the mission. There was life capsules scattered all over the enemy zone but still it was tough to fight with those extra doses of life.

But one day my cousin brother told me about the cheat codes of the game where by pressing some keys I could recharge the life level any time and at any stage of the game. And after that game was a cake walk. Cheat code was activated by pressing some combinations of keys like Alt+Ctrl+Delete and then pressing shift 5 times. If we can see this from the point of view of the enemy army then our Robo Cop was doing miracles like anything and they must have been terrified. But our Robo Cop was just manipulating the Fabric of life of that game because he understood the fabric, composition and origin…everything.

The case is similar when we see our sages doing miracles. Like in 1960’s one indian Sage Swami vishudhanand who performed some remarkable feat in front of one English Journalist by using Surya Vigyan. He created Jasmine and Rose fragrance out of thin air, then they killed a sparrow which he brought back to life by manipulating the sun rays. Swami vishudhanand is said to had visited “Gyan Ganja” a mythical place claimed to be situated in Parallel dimensions in Himalayas.

We hear many things about various spiritual powers like invisibility, levitation, third eye, telepathy etc. All these look part of fantasy world when we take our world as mere physical phenomenon but if we  can understand the base material of our world then we can see that nothing is impossible here…whatever we can think is possible here because there is no real physical limitations…it is all in the design and composition. Our Miracle Sages could expand their consciousness to higher dimensions (beyond our 3D world) so they can do things which look impossible to us. Just like a being living in 2D world (surface) is locked in a 2D room but a 3D being can bring him out of the room through 3^rd dimension of height which is invisible to 2D being. 3D being can pick the two far corners ( Corner A and Corner C of a flat surface) of a surface and make them touch each other in 3^rd dimension resulting in time travel for 2D beings.

(There is also quite a possibility that we are created/improved by highly evolved aliens but that would only create another layer between God and us…all else remains the same. This alien touch may also explain the missing link between ape and human in Darwin’s evolution theory and that missing link or gap never happened at all…there is no time gap and we might be created right from the ape to this human image.)

Still the design and structure of our world looks crude

But if you ask me then we are not at the top of hierarchy. Our world does not appear absolute in design and structure. If we can see all around us with open mind and wisdom then least we will realize that world which is apparent to us is at the most inferior level relative to the real absolute world. The reason- just look at the level of our ignorance, darkness, doubt, depression, devoid, divide, aimlessness, uselessness, chaos which prevails everywhere is the proof that our version of the world/reality lies at the rock bottom far from being the absolute. Like, just look at our food structure- why a lion is made to kill others for his food...why we all need to use/end/kill others for our food because all our fears, enmity starts from food. Wasn't there a better way to organize our energy requirements like straight from the sun...sit for some time in sun and it is done or some other better way...all this looks primitive. (This may also point towards something else- something here in our life is more important than all these things and that's why these things were not cared for much).

I think the best proof for the inferiority of our world is that with our current level of consciousness it is almost impossible for us to comprehend the beginning of this universe from nothing but this is going to be the ultimate reality and only we are unable to comprehend it.  Just like three dimensionality of the space which is also just our version because Universe is multi-dimensional. If God really wanted to create an absolute world then our current version could never be the best possible image. Life does not seem perfect here…death makes everything useless…someone could have made it much better so that means this is not the BEST world…our world looks incomplete. This appears more like a test facility.

We are here just to prepare ourselves for something much larger, vast and absolute. Many times I feel that after my death I would regain the consciousness as someone else may be in some other version of reality and the life which I have lived till death would appear more like a hazy dream and I may not even surprise at the end of this dream because in reality this version of mine never existed and all the time I was someone else in a much better reality and the journey of this Tier 3 world was part of something big.

Many times in my dreams, I have encountered and remember those memories and incidents which in real life have never happened with me. Like few days back, in my dream I was at a railway station with my brother and while standing there I remembered an old incident where one man shot at me with gun but I escaped narrowly with bullet brushing me. So that incident was a memory of Gurpreet of Dream but this incident has never happened with me in real life so then whose memory is that? I see these types of dreams regularly and now try to write them as soon as I get up. Many times when I am in half sleep I remember/see people, places, incidents which seem as real as anything can be but as soon as I wake up everything disappear into thin air…even after trying hard I could never recall anything of that state but I do remember that that was something very real.

So here in this Tier 3 world, we all try to avoid death and try to lead a life in denial but REALITY may be that the ultimate aim of our life/all efforts is just to get READY for this most important EVENT we call DEATH because if we can see there appears nothing much worth in this life...it appears and is low grade. So maybe we should think of welcoming this Death with hope rather than despair as death may be the only good thing about this life. We may be wrong in thinking that death is the end of life but instead the reality may be that real Life begins only after death.

Time: An illusion or fourth dimension

This leads me to Time which is my favorite subject. Time has always fascinated me and every night when I lie on bed waiting for the mysterious sleep I think about the most mysterious- the time, its movement and try to visualize the spatial aspect of time (Space is the physical demonstration of time or time is another dimension of space).

Once I visited (encountered) a so called Guru and during discussion (In sat-sang) he remarked that our old Rishis were great and right when they said that in meditation we need to be in present (no thinking about the past and future). In life also, this is a lesson to live in present (Vartman) and not to worry about the past and future. While he was narrating this to the gathering he was demonstrating a mysterious smile (as if he can see their past and future).

When we were alone then I told him that he was giving wrong interpretations and turning the vision of our great sages into lower levels. He was not happy. But I told him that the Indian sages/scriptures have settled for only one reality of time and that is-NOW. But this “Now” is not the “Present” as is generally believed. Our rishis talk about the 3 time dimensions (Past, present and future) being only the one NOW…everything is Now and our “present” is only one segment of it…this is that part of “Now” which is grasped by our senses at the moment of transition. Our senses cannot grasp the other parts of this “Now” which are past and future.

We think that we understand time and consider past, present and future as 3 dimensions of time. Past we think does not exist and Future we think has not materialized yet and hence does not exist so only present is real and we exist in the present. But what really is Present? Do we really LIVE through present? Do we really feel it, touch it? Do we really know what the “Duration” of present moment is? I mean what is present moment? What is the length of present moment…whether it is 1 second or 1/10th or 1/50th of a second? But if we can sit for a while we’ll realize that we never feel any present moment at all. Can we feel, taste, differentiate or experience “a present moment” in its entirety? No! We can’t pin-point the real duration of this present moment because even one second has length and this one second has past, present and future. So what is the actual duration of moment of present-the now? Present seems more like a transient phase where future is fast turning into past. And if we can say “Stop” just now then I can tell you we’ll not be having a “still well defined material world” in front of us. In fact all we’ll have is only a lot of hazy lights, colorful lines all over the space because in reality we have stopped the “moment of transition” not the present.

Present moment is a non-perceivable moment where future is fast becoming past…when phenomenon exists for us for that extremely short duration of time. I think it is wrong to call it a duration but a point (of trasition) where things are continuously becoming past from future. Present has no dimension at all just like a speck of dust. Present is just a “small hole for us” through which we observe phenomenon in motion.

So it seems that past and future are more real than present and these 3 must co-exist to create the eternal NOW only we can’t see them together. The past and the future cannot be non-existent for if they do not exist then the present does not exist either. They must co-exist together somewhere…in another dimension unknown to our senses.

Just like a video game….past and future events exists with all possible outcomes….consciousness is just a medium to experience the phenomenon as per the choice. The events take place and consciousness can shape them but still they are confined to the physical and quantum laws of this material (not sure) world. Within these laws every event holds a definite potential of occurring.

The moment of present as we call it, is nothing but a perception of the fourth dimension of existence. Present is always a small point where future is becoming past at fast pace in reality it never exists. It is just another “dimension” to feel the world…world as we know not real. Time becomes a dimension for lower dimension beings like a two dimensional animal will see the 3rd dimension of a cube as something past, present and future events as he can’t conceptualize a cube as a whole as a 3rd dimension thing. So time comes into existence whenever a low dimension being faces a higher dimension. When a 1D line becomes a 2D surface then breadth dimension will appear like a time to a 1D being as he can’t see 2D as a whole. So the present we feel and time movement we feel is nothing but the existence of 4th dimension which we feel as passing of time.

A 2D being will feel the 3rd dimension of a cube as a movement of 2D surface…movement in time…the 3rd dimension of height will appear as time to him. So for them the space means 2D+T. I feel constrained to say time as the 3rd dimension because we can see it is not…it just appears as time when in reality it is height…a physical dimension.

When a line moves in the direction contained in it…it is in one dimensional world so as a surface in 2D or a cube in 3D world. But when they travel in a direction not contained in it (but perpendicular to it) then they are moving higher up in the order so when a 2D object moves upwards or downwards he is entering into 3D world. So just like it when a 3D object moves in a direction not contained in it then it is entering the 4D space and can we say that the only dimension seems capable of being perpendicular to the 3 spatial dimensions of the 3D world is “time”?

I think I need to stop here as the things are really getting complex (may be interesting too) and it is better to take a breather now. I think now in order to explain the relationships of 3D space with higher dimensions I will have to use images otherwise we may not be able to visualize the fourth dimension. So I am stopping here for time being…will continue the journey soon…although it seems impossible for me to stop the flow in my mind.

(Reach me at oscillationss@yahoo.in)

Narayana Hrudayalaya Ltd and Max ventures : Result Update

Narayana Hrudayalaya Ltd-Narayana has given great set of numbers…even surpassing all the expectations:

Fig in Cr.
Description	Sep-19	Sep-18	Growth %
Turnover	822	713	13.26%
EBITDA	128	76	68.42%
EBITDA margin	15.57%	10.66%
NP	45	13.5	233.33%

As we can see, against top line growth of 13% the growth in NP is staggering 2.3 times so operating leverage is getting into action now and this will only increase from here on. NH still has 11% of its total bed capacity as new centers and these have negative EBITDA of around 14 cr this quarter and as the same will get matured the performance will be even better. EBITDA margins are at 15.6% vs 10.6% last year. For its Cayman island hospital HCCI- the revenue growth is 26% from USD 12.7 million to USD 16 million (around Rs. 114 cr). At 24% its EBITDA margins are great and this shows the potential when NH will decide to expand HCCI capacity and will open more such centers worldwide near developed countries. But that will happen once NH is free from India and if you ask me that may take some more time as India in itself is yet an under-developed market and scope of expansion is vast. NH has invested big in last 3-4 years and I think it’ll take a little breather now and then the next round of investments will come. But in my view for global expansion they need a partner and it is not the best model where NH is putting all the money as this will run into big money so very soon we’ll see something big in this line also from NH…may be some foreign governments will chose NH as their partner for their country wide healthcare programme.

I still find it hard to believe why our government is slow in recognizing these new pillars of Indian economy. Why our economists still think that our consumption is slowing down and we need to consume more for the growth? If you ask me then this should be the problem of some developed country like America not a growing country like India. We need investments into other segments now. Autos and FMCG are at saturation point as per our current status of income and employment levels so we need to increase our income and employment penetration into real economy. Healthcare is our expertise and we urgently need to build a business model around it to capture export business whether in the form of medical tourism or investments in other countries like Africa. African nations regard India as blessings due to extremely cheap medicines for deadly diseases like AIDS produced by Indian pharma companies like Cipla and Laurus labs (laurus Labs is another name which will become big in the near future. I have invested big chunk of my portfolio in It. This is my second pharma investment after Biocon).

Recently Narayana Health has been recognized as one of the world’s most innovative health care providers by Fortune magazine’s annual “Change The World” list of companies. It is at 33th place out of 52 and it is the only one out of 9 firms with less than a billion dollars in annual revenue. It even toppled the global giants like Alibaba, Hilton, eBay, JPMorgan Chase, and Patagonia. Here, the scale of charity is not the factor to look after but along with the desire to do something good for the humanity/society the firm should have a great sustainable business Idea and that is what set NH apart from the crowd.

I am going to do some more buying of NH in order to celebrate the success of NH. I do not think that we may be able to see this one under 300 may be after tomorrow.

Max Venture: The results are just great. But the most hearting thing is the announcement that they have bought a distressed real estate asset in Noida. I was expecting this and mention the same in my previous post also. I had marked this step as a sign of their strategy that they are going to make the maximum of current state of affairs of real estate sector.

They have entered into an agreement to buy a land parcel at a prime location on Noida Expressway (Sector129) for Rs. 110 cr and development potential of this land is approx. 7 lakh sq ft. Just like the Max Tower they will make a Grade A + leasable Commercial Office space. They have built the max tower on “Workwell” philosophy where employee can also enjoy recreational activities along with office work. Better organizations these days are recognizing the need to offer their employees a stress free and engaging work environment in order to make them perform at their full potential and staying healthy. So recognizing the need of these companies, Max has built this tower and this shows their vision in judging the best opportunity. They have the skills to develop real estate because in Max Healthcare they have developed some of the best hospitals in India and this experience of developing top quality real estate will prove to be a big difference in strong execution skills and they have proved the same by completing the max tower in record time with one of the best in design and quality.

For results, their topline is at 435 vs 268 cr last year and PBT (excluding other income) is at 13.23 cr vs loss of 12 cr last year. With very high growth potential, Net worth at 870 cr, right issue at a valuation of some 950 cr …it is trading at a valuation of 576 cr. Good worthy bet in commercial real estate.

(Views are personal and should not be taken as a recommendation for buying or selling a stock. Stock markets are inherently risky so kindly do your Due Diligence before investing. I am not a certified Sebi Analyst and holding the shares discussed in this Post. Reach me at oscillationss@yahoo.in).

Narayana Hrudayalaya Ltd: The Axis Mundi of Stock Market

Narayana Hrudayalaya: This is one stock in which I have invested quite a big part of my portfolio and advised everybody to invest big in this one. I am continuously advising this one at this blog- All the way from 250 in 2016 to 200 recently. Its stock price has increased quite a bit after that and now it is at 275. Healthcare is the next big thing going to happen in Indian economy. Healthcare is a stunning option for Indian economy and this is where we have unmatchable technical expertise and we can create an affordable global hub for healthcare services to promote medical tourism. We already are one of the biggest and highest growing medical tourism but we can create a real giant much bigger than IT industry. Unlike other industries, healthcare sector create more jobs as the role of machines are comparatively less.

And when it comes to affordable healthcare then NH is the undisputed leader…in fact no comparison at all. Apart from medical tourism local demand is going to be strong due to rising income levels and life expectancy, health insurance penetration and Government health schemes.

Healthcare sector is going to see the big disruption in the near future and NH is going to be the major disruptor. Due to high pricing healthcare is still unaffordable to the masses. Across the globe, still 90% people can't afford heart surgeries and are dying a death which can be and should be avoided. Healthcare industry due to its own inefficiencies has created a situation where people believe that healthcare indeed is a premium high price thing. But then NH happened and they have brought the assembly line disruption in healthcare and proved to the world that even at much lower prices healthcare business can be profitable. That's why i feel healthcare sector has HUGE scope of scale and NH has everything to capture a big chunk of this opportunity. 

In fact i want our government to take this industry very seriously as this has the capability to do something big for our economy even bigger than IT industry and can be a large foreign exchange earner. I even want our Government to support (financing) the likes of NH to open hospitals across the globe in order to earn precious foreign exchange...our government needs to recognize the points of strength in Indian economy and then doing all it can do to support and grow those. Nothing at present is better than healthcare in fact if you ask me then i can say our technical skills in healthcare are much better than Pharma and IT industry. Our doctors are easily one of the best across the world in their skills and we need to learn to harness this skill of ours.

We started picking NH around 260 2-3 years back and when it touched 350 during peak market in 2017 I was thinking that I would have no other option but to invest more in this at 400-500 levels. But then market fell and NH started falling also and recently it touched 180 levels and I grabbed the opportunity to invest as much as I can at these levels. Now my average is some 230-240. NH has already given stunning improvement in its results in last 2 quarters. The improvement although was inevitable because as the maturity profile of its hospitals increases they generate more profits.

Actually in Healthcare there is high operating leverage as most of the expenses are fixed so when a hospital is new, revenue will be lower but fixed charges like depreciation/lease rentals of building, machinery, staff payments hit hard. Healthcare uses very expensive medical equipment so upfront fixed expenses are high so this gives a false impression of losses. But as most charges are fixed so most of the incremental revenue goes to bottom line and this is precisely what has happened with NH as its topline is growing some 15-20% but bottom line is growing 400-500% for last 2 quarters. Even for this quarter results I expect around 200% growth.

Just to offer a perspective on the impact of operating leverage- if we compare the last 2 quarters results with corresponding period of last year (Mar-18/jun-18 vs Mar19/jun19) then the following picture emerges:

Fig in Cr.
Description	Mar-18/Jun-18	Mar-19/Jun-19	Growth %
Turnover	1300	1542	18.62%
EBITDA	67	191	185.07%
NP	6	67	1016.67%

So as we can see fortopline growth of 19% the corresponding growth in EBITDA and NP is staggering 185% and 1000%. This shows the massive re-rating potential of NH. Due to the mix of mature and new hospitals which impacts the bottom line individualy in opposite direction it is not propoer to value it on the basis of conventional PE ratio. Here EBITDA will give some insights. If we take the recent deals of Fortis and Max Healthcare at around 25 times EBITDA levels as benchmark then at EBITDA (last 12 months) of 340 cr then this value the NH at some 8500 cr. But both Fortis and Max Healthcare has much higher proportion of mature hospitals while NH is quite a young fellow. So its young age,  precision level capabilities and low cost model  are sufficient to value this one much higher- at 30 times EBITDA which makes this one valued at 9000-10000 cr (after deducting debt around 700 cr). Its current market cap is just 5600 cr. Also, we should keep in mind that its EBITDA is growing very fast and it will not be a surprise if we see an EBITDA of 450 cr for this year. So this will make 10000 cr as some 20 times of EBITDA which is quite well within the reach.

HCCI-the jewel in the crown

Further, it has established one of the best hospitals in Cayman Island near USA named HCCI. Earlier NH was having 29% stake in it but now they have acquired 100% stake in it. This is a novel experiment by NH to capture the US/Canada and Caribbean markets with its low cost model. It has received great response and accolades for top notch quality care at affordable rates.

HCCI’s pricing is not as low as the pricing NH charges in India, but services are typically one-half to one-quarter lower than in the US. For example, a Coronary Artery Bypass Graft (CABG) is currently priced at about $32,000, compared to a 2015 US average of $151,785. Hepatitis-C treatments under commercial coverage in the US currently average $75,000 vs. $19,000 at HCCI. The average 2016 US price for hip replacement is $39,299, while HCCI offers bundled pricing of $15,800. Dr. Shetty has set an ambitious goal of reducing all these prices further by 50% in five years. HCCI’s initial 104 bed facility cost $46 million or about $442,000 per bed, compares to more than $1.5 million per bed currently in the US.

HCCI is already getting significant traffic from the Caribbean, Central and Latin America and Canada and traffic is now growing from the US as well. It has shocked USA healthcare industry with this kind of affordable pricing and many USA healthcare analysts/players are lauding NH for this initiative. HCCI is going to touch some 400-500 cr revenues this year and it has very high operating margins of 27-30%. But most important thing is that the success of this initiative will create the blue print for more such ventures and nobody from India has the caliber to take this type of innovation and risk but this is something which has the potential to transform global healthcare industry and Indian economy.

Earlier, American healthcare industry never considered affordable indian healthcare as a threat because nobody will travel to India from USA with all sorts of negativity about Indian hygiene and poverty. But what Dr. Devi Shetty has done has literally shaken the Americans to the core and they are considering NH as a very serious threat. US people are expecting that HCCI will force American healthcare industry to reduce its high prices.

NH-The Axis Mundi

NH is a disruption never seen before and at present I don’t think that analysts’ fraternity has the requisite expertise to measure its margins and topline growth in the future. I adore this man Dr. Devi Shetty and feel there is nobody in India (may be Globe) who can match with him in terms of capability, eye for details, aggression, integrity, passion and most importantly humanity. He has never returned any poor patient for money and there are many stories where poor people adore him like God placing his picture amid other Indian deities. Sometimes back, I thought of writing a detailed post on the strategy and future of NH and Dr.Devi Shetty…I went on writing and writing and so far it has covered some 14-15 pages and I am still not satisfied and I wonder whether I’ll ever be…because I am in awe of this man Dr. Devi Shetty. For this article I have just used some parts of that article. But I will submit the full study very soon…I need to stop at some point in order to enjoy the surroundings.

Today is the result day for NH and I am counting on hefty growth in topline and bottom line. So it is a great fit for every portfolio and a great buy below 300. CMP is 275.

NH has brought down the prices of heart surgeries to such a low that the same looks like a charity.  It offers heart surgeries at $1000 compared to $40000-100000 by western counterparts!!! It is offering these even at 1/3rd of prices in normal Indian hospitals. And these prices have left the globe in awe but even at these prices NH is earning profits. NH has taken the price of heart care to 1990’s levels. Also earlier avatar of NH was more of a philanthropic one where it didn’t care much for the returns. But after IPO NH is focusing on profits also and in order to maintain the affordability it is reconstructing its business completely.

NH is just like the great Kailash parbat- the only un-climbed summit of the world (However as per Tibetan legends, Milarepa the great Tibetan Mystic has climbed the summit in 12th century...and none after him). It is full of mysteries which are just a sign that it is the summit of spirituality and a place just best suited for Gods to rest and watch us.

Some mystics regard Mount kailash as Axis Mundi...means a place where Earth meets the Divine. They say it is the door way to the world of Gods...the Sachkhand...the Shambhala.

NH is the Axis-Mundi of the stock market where charity and compassion meets business and you can't decide whether it is business or charity. And the high PE ratio it deserves is only for the Reverence.

(Views are personal and should not be taken as a recommendation for buying or selling a stock. Stock markets are inherently risky so kindly do your Due Diligence before investing. I am not a certified Sebi Analyst and holding the shares discussed in this Post. Reach me at oscillationss@yahoo.in).

Max India ltd and Max Financial-Updates

Dear All, Max India has run up quite well after our recent entry at 56 in Aug-19 (click here for previous post on Max group).It is trading around 80 so good 50% growth in last 2 months but if you ask me it is just the start.

Healthcare Business: As shared in the last post on Max India, I am a great admirer of this man Abhay Soi the current chairman of Max Healthcare and I have very high expectations from him. And by looking at this quarter results he has just proved his mettle. They have given stunning set of numbers. Max healthcare revenue grows 13% to 753 cr vs 664 cr. But the star performer is the EBITDA margins which have grown 79% to 116 cr vs 65 cr last year. EBITDA margins are at 15.4% an improvement of 4.36%. Net profit is at 30 cr vs loss of 7 cr last year. So this is a great turnaround and looks like Abhai soi is straight on the task. He is a champion in turnarounds and revivals…a master in cost rationalization and improvement in efficiency.

I do not have the numbers for matured and new hospitals of max healthcare because for Apollo Hospitals the EBITDA margin of matured hospitals is around 22% but for the whole business the same is around 14% so Max healthcare is doing fine although there is still immense scope for growth because current phase is just the start of restructuring post-merger with Radiant life.

Real estate business- As I have shared earlier real estate is going to be the next focus area for the group and I am expecting high activity in this sector from the group. Like for Max Venture, I am eagerly waiting for some news regarding acquisition of some distressed realty project by Max Estates. I think that very soon we’ll see the heightened activity in real estate as distressed real estate developers will run for shelter to much better players like Max group. Banks will start pressing for loan repayments now as they have almost cleaned and provided for the infrastructure NPA’s and next segment is real estate where I think the quantum of distress will be less because at good prices real estate still is capable of generating high demand as compared to distressed assets in the form of Road, power and steel plants.

Max Finanacial Services: Max Fin is also doing good and touched 480 from 400 levels. As I have shared earlier this one is grossly undervalued. Max life is the brainchild of Analjit singh and he has transformed this one into one of the best professionally managed insurance company with very strong ethics. They still have one of the most productive and well trained agency network and this is going to be a critical factor because Max Life is looking to grow their pure protection business (term plan) where bancassurance has very little impact. Bancassurance is best suited for ULIPs where ticket size is higher not for term plans. But term plans are the best for life insurance business as they are simpler and high margin products and Max India is at 2^nd number with 17% share of term plans out of its total premium income. HDFC is at the first…the likes of SBI and ICICI are much behind and they are mainly ULIP players the demand for which is fading away and that’s why I feel in no case SBI life should get so much higher valuations than Max life.

Earlier i made 5-6 times gain in the erstwhile max India which I sold in 2016. But after that it has almost doubled its premium income and but trading at much lower price and the major reason as I have explained earlier is pledged holding of Analjit singh (some 80-90%). But as i have explained in the earlier Post the debt of analjit singh is against real estate assets and he may choose to sell his stake in max Life or some real estate assets although as per the news reports he is looking to sell 10% stake in Max Life and I think with this debt issues will be resolved.

But one thing, Analjit singh has chosen to part away his holding in Life insurance business but have not opted to sell his real estate assets which clearly shows his priorities at present and that’s why I feel that he is going to do something big in real estate.

Coming back to Max Life, apart from stake sale and pledged share issue the next big trigger is investment by Axis bank which is looking to establish its own insurance business. Axis bank holds 2.99% in Max life at present. I think Analjit singh may even sell his 10% stake to Axis bank although as per media reports Munjal family is in the fray.

But still Max Fin is trading very cheap. As I have shared in the previous post, at that time its market value was around 10000 cr which means it was trading at 1.6 times (now around 2) of its Embedded value (EV) which in my view was extremely low for a highly efficient and reputed life insurance player. SBI Life trades at 5 times its EV and HDFC at some 20 times. Last year both SBI Life and Max Fin were trading at 3 times EV so one can see the gross undervaluation. Could not get time to study the results of Max Fin but I am planning to post a detailed study on max Financial soon. 

So I think both Max India and Max Financial are still worthy for investing money but I also feel that this may be the last opportunity to pick both at these levels.

 (Views are personal and should not be taken as a recommendation for buying or selling a stock. Stock markets are inherently risky so kindly do your Due Diligence before investing. I am not a certified Sebi Analyst and holding the shares discussed in this Post).

MSTC Ltd: In a Parallel world it is trading at 50 PE

Dear All  MSTC Ltd  is my recent entry and I think market may have made a grave mistake in valuing this one as some trading entity with high debtors issue and concluded at worrying levels of working capital but they could not realize that this is the thing of the past and valuation in stock market is derived from the future. MSTC in its new avatar is scaling down its working capital intensive trading business and is focusing on new age businesses- B2B ecommerce and scrapping of old vehicles and both these businesses are stunning.

People run after the likes of Flipkart madly which are incurring huge losses and business model is not that strong because in my view they are yet to add value in the supply chain of a product. They have established themselves so far as discounting entities rather than adding some value to the entire process by bringing the cost of distribution down and then passing on the same in the form of reduced prices to common man which sadly is not the case. Flipkart has sold merchandise valued Rs. 42000 cr on its platform and with astronomical losses.

Compared to this, MSTC on its B2B platform executes transactions of some 1.25 lac cr with revenues of  220 cr and around 150-180 cr as profits (not calculated, just rough idea) and I find it hard to believe that people are dying to buy fancy huge loss making B2C start ups but ignoring B2B businesses available cheap. B2B ecommerce has much bigger transaction value, much larger transaction volumes and very sticky revenue stream and clients. The problem not solved by B2C ecommerce is solved by B2B ecommerce and they provide tremendous value to the businesses wanting to save time and costs, maintain the quality and security in procuring goods. B2B Ecommerce is very matured and adds immense value by providing reliable and secure trading, saves time and ensures fair price discovery.
 
Just imagine the time and effort required by Mahindra and Mahindra to source scrap steel for its auto division- selecting vendors, preparing bids, evaluating bids and then logistics and payment etc. All this requires and consumes resources and time but on B2B platform of MSTC the same can be executed extremely fast and discovered price will be much lower due to large numbers of vendors competing each other. Due to these reasons, B2B ecommerce has high networking effects just like Naukri.com which is always profitable for last 2 decades and nobody could grab the market share from it. This happens because of the first mover advantage where large numbers of sellers and buyers provides huge networking effects.

I am also surprised at the lower valuations demanded by Government while going for the IPO. Let me share something here. Mjunction is another B2B ecommerce player which competes with MSTC. Tata steel and Sail are 50:50 JV partner in it. It executes orders to the tune of 1.5 lac cr and its revenue is around 257 cr and NP is around 45 cr last year (MSTC appears to have much higher profits but that I think may be due to the fact that entire resources are allocated also among other verticals with high turnover…but I am yet to compute the NP but in any case the same is going to be very high in percentages). Tata steel is looking to sell its 50% stake and it is looking at valuation of some 3000 cr at 70-75 PE. So we can also value MSTC ecommerce business around 2000 cr to 2500 cr quite easily while current valuation is just 800 cr trading at PE ratio of around 6-7!!. Further, Flipkart has been valued around 1 lac cr in the last deal by Walmart!!! This gross undervaluation is what they call a Glitch in the Matrix.

Another gem in the crown is the coming old car shredding business which MSTC is doing with Mahindra in equal JV. They have started the first plant in Noida and second plant is coming in Chennai soon. No doubt this is going to see huge growth and going to be the major value creator.

Further, analysts were shouting that MSTC is dependent upon government support to get the revenues from govt and other PSU organizations although they are dying to buy another Govt supported stock IRCTC. Although there is still nothing wrong in government providing the support to businesses because I have always felt that in some sectors it is better if government takes the initiative and put efforts in creating infrastructure and faith in the sector. Chinese state owned organizations have catapulted china into a Giant only on the basis of their efforts to create an environment of confidence and capability. Govt as a client helps these niche businesses to sharpen their skills and mend any loopholes. MSTC has created a highly capable and trustworthy infrastructure for B2B ecommerce by ensuring fair discovery of price and payment settlement eliminating all the third party risks. Due to trust factor, people still do not place orders at another big indian B2B startup Indiamart which is coming with an IPO and this may further establish the valuation benchmarks and rerating of MSTC.

But MSTC is already focusing on partnering  with private sector and recently has entered into deals with Reliance, L&T, Mittal energy for sale of their scrap at its platform and there is no doubt that scrap is just the start and in my view very soon the relationship will be expanded to cover e-procurement also. And due to this alone MSTC deserves big re-rating because it has demonstrated that it can attract Indian private sector giants to trade at its platform which is a big achievement for a PSU which is generally considered lethargic. Here, these private sector are not partnering with MSTC due to some government factor but the fact is for capturing the business from private sector MSTC is competing directly with other private sector B2B ecommerce firms.

MSTC is expanding the coverage of its B2b offerings and off late has covered agricultural produce, coal, govt land, minerals etc on its platform. Just lasy day it has entered into a tie up with Allahabad bank to auction the latter’s NPA on its ecommerce platform. This is indeed a very innovative product and this is going to motivate other banks also to come to its platform to ensure the fair and efficient settlement of NPAs. 

Farmers in our country are not suffering due to production issues but here our main pain point is the very inefficient supply chain where farmers get very low proportion of the final price. But this is not something which can't be solved. Just take the case of Dairy sector where due to supply chain revolution by co-operatives like GCMMF (Amul Milk) farmers get some 70-80% of the final milk price. This is a big revolution and needs to be replicated in agriculture produce also. This high share of farmer is the reason that MNC dairy giants like Danone are struggling to capture Indian market because in India dairy chains do not own large dairy farms keeping hundreds of animals. Here farmer is the producer and the relationship with the farmer in the form of milk sourcing tie up acts as a big entry barrier. It is very costly to run a dairy farm in India due to high land prices etc.

Similar innovation is required in agri produce supply chain also and this is one area about which i have already shared a lot in my earlier posts related to MCX/commodity trading. So in order to achieve the same MSTC has started auction and e-procurement of agri produce on its ecommerce platform (launched E-Rakam) where farmers and retailers/processors can trade and this has ensured good price discovery. At present, MSTC is working on solving the second aspect of this price discovery which is logistics support because someone has to do the role of aggregator and ensure the supply of agri produce to the buyers. MSTC is in touch with some innovative logistics startups and some airlines also. This is an area which is going to be big and why i think so because we have no choice otherwise our farmers will continue to reel under poverty and inefficiency and Government has to put (or waste) scarce and valuable resources to save the farmers. So this is an area where we urgently need to do something. Contract farming is another option to solve this mess and recently Tamil nadu government enacted a law in this regard and contract farming can save the farmers from the weird price moments and the inefficient supply chain.

In Agri produce auction and procurement at MSTC platform, i think various government agencies like NAFED and FCI can take the lead as this will motivate other private players to join and this will also increase the trust in the trading platform.

I have started buying this one from 115 and very soon going to put all my planned investment in this one. CMP is around 123 which is an excellent opportunity to enter and it is buy more at every fall type of stock. I have shared this small study as I feel that it is looking set for re-rating very soon and I will share my detailed study at some other time.

(Views are personal and should not be taken as a recommendation for buying or selling a stock. Stock markets are inherently risky so kindly do your Due Diligence before investing. I am not a certified Sebi Analyst and holding the shares discussed in this Post.Reach me at oscillationss@yahoo.in).