Prepared for: personal research use. Date: September 2026 Price: INR 961.15

Business Snapshot

Shilpa began as an API manufacturer and has long been associated with oncology. The current company is trying to become a broader specialty pharma and integrated CDMO platform across small molecules, formulations, biologics, ADCs, peptides and recombinant albumin.

Where the business is today

Q1 FY27 was the fourth consecutive record quarter for revenue and EBITDA. Consolidated revenue was INR 469 cr, EBITDA INR 139 cr, and EBITDA margin 30%. Reported PAT was INR 101 cr, helped by a tax reversal; management said normalized tax should move toward about 25%.

Segment evidence

Q1 FY27 segment momentum was broad: API revenue was INR 260 cr including captive demand, formulation revenue was INR 198 cr with more than 100% YoY growth, and biologics revenue was INR 52 cr with 42% YoY growth. The official presentation’s consolidated revenue breakup shows API INR 216 cr, formulations INR 198 cr and biologics INR 52 cr.

Why Capability Could Be Real

Shilpa’s positive case rests on breadth plus integration. Many Indian pharma companies can claim one piece of the puzzle: API chemistry, formulation development, injectables, biologics, or manufacturing services. Shilpa is unusual because it is attempting several of these under one operating architecture.

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Source of all data is RBI

1 Credit growth bottomed at 9.0% in May 2025 and has almost doubled to 17.7% in the twelve months since.Deposit growth moved too, but far less — from 9.9% to 12.2%. The result is a 5.4 percentage point wedge that banks have to fund from somewhere other than retail deposits:

The banks least hurt are those with the highest CASA ratio (current and savings balances as a share of deposits), because their funding cost barely moves. Banks plugging the gap with bulk money see margins compress first.

2

At 82.7% the system has limited room to keep growing loans faster than deposits without paying up for funding. Historically, a high CD ratio resolves one of two ways: banks compete harder for deposits which raises funding costs and squeezes net interest margins or credit growth slows to meet deposits. Both are margin events; only one is also a growth event.

3 The pools that grew fastest, personal loans and lending to non-bank finance companies, are the least seasoned.

Expect continued growth in personal loans

4

unsecured retail is the highest-yield and highest-risk slice of that growth, and the RBI has already intervened once by raising risk weights on it — regulatory action is a live variable, not a tail risk. Second, the mirror image of industry's decline is that corporate credit is now the underpenetrated pool. If a private capex cycle does arrive, the banks positioned in corporate lending have the most room to grow into it.

5

Falling policy rates cut both ways for a bank. They lift the value of the government bonds it already holds treasury gains, which flow to reported profit while lowering the yield on everything it lends from here.

6 savers are being paid very little to stay.

savers respond: a 2.5% savings rate against 12% broad money growth is a strong push into mutual funds, equities and insurance.

7 credit expansion in Figure 1 is being driven by commercial bank lending, not by central bank liquidity.

8

UPI is king and any new business has to ensure UPI is offered to stay relevant

Putting it all together

Credit demand is running ahead of deposit supply (Figures 1 and 2), and banks are managing the gap by paying savers very little (Figure 6) rather than by slowing lending. That is why margins look healthy today.

It also creates the two things worth tracking. Savers are leaving the deposit shortfall and the flows into mutual funds and insurance are the same phenomenon seen from two sides. And the loan book absorbing all this funding is now a household book, not a corporate one (Figure 4), which means the system’s asset quality is tied to jobs and wages rather than to the capex cycle, on loans too young to have been tested (Figure 3).

The near-term picture is good: rates are still falling (Figure 5), liquidity is ample (Figure 7), and growth is real. The questions are what deposits cost when the competition for them starts in earnest, and how the 2025–26 vintage of retail loans performs when it seasons.

Before you leave

Tremendous amount of work goes in producing content like this consider upgrading.

It frames the addressable market as growing from ~$3bn toward ~$21bn over six to seven years.

A paid subscriber requested this report via DM now available to all subscribers

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Just marginally above S&P500 since start

A lot of churn happened folio snapshot is below only VAS and IVV were untouched or added

Note above is snapshot and things may change after writing this post, I have 20% in benchmark and 27% in muted Aus ETF so if I have to outdo benchmark then I have to find the alpha in rest of folio. I am giving thought to this and will share in my next year right up as you will see changes to align to such philosophy.

My rationale for current lot may change on a whim as I warned you I churn when facts change its a very small portfolio and we dont have behave like fund managers or billionaires it is our money and it should be positioned to do best

1. HEUR - General revival of Europe region after jolt from Trump, exporters tracked in this fund will benefit

2. DRGN - Chinese AI tech would be adopted everywhere except western democracies just like Chinese good as they are cheap

3. META - read this ,a punt of zuck

4. GRIN - most hated emerging market i.e. India will surprise many

5. COH - bought on the day when it dropped 40%, already laughing :)

6. UBER - Cheap and will benefit from autonomous vehicles on streets

7. AINF - Suppliers to AI ecosystem

8. Others - some space industry and cyber security ETFs

Where I killed it last year

1. Silver

2. GOLD

Where I got killed last year

1. BTC

NB: because they way retirement funds is designed here in Australia , you get continuous liquidity drip feeder that allows easy rebalancing

Not financial advise just my yearly notebook to keep myself accountable

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In the 1930s, while the Golden Gate Bridge was being built, one safety decision changed the psychology of an entire construction site.

A safety net was installed under the bridge during deck construction. It saved 19 workers who fell and survived; those men later became known as the “Halfway to Hell Club.” The net did not remove the danger, but it changed how people behaved around danger. It gave workers the confidence to keep doing hard work in a high-risk environment.

Investing in small caps works in a similar way, except for one uncomfortable difference.

There is no net.

When small-cap investors fall, they feel every inch of it. The long-term numbers may look beautiful, but the path to those numbers is psychologically brutal.

On a spreadsheet, these numbers look almost unreal.

Nippon India Small Cap shows a 20.78% 10-year CAGR. Quant Small Cap shows 20%. Axis and HSBC are both above 18%. HDFC, Kotak and DSP are all in the mid-to-high teens over a decade.

This is why small caps remain so attractive. At 17–20% annualized returns, money does not merely grow. It transforms.

But this is also where investors misunderstand the product. They see the long-term return and assume the experience will feel like the long-term return.

It never does.

The invoice arrives in the short term

The same funds that look impressive over 10 years can look ordinary, frustrating or even wrong over 1–2 years.

HDFC Small Cap has delivered 17.25% over 10 years, but its 1-year return in this dataset is -1.97%. Nippon has a 20.78% 10-year number, but the latest 1-year number is only 5.26%. Kotak shows 16.64% over 10 years, but only 1.11% over 1 year.

This is the emotional toll.

When you look backward at a 10-year chart, the bad periods look like tiny bumps. But when you are living through them, they feel enormous. A flat year feels like failure. A negative year feels like betrayal. A two-year period of weak returns makes investors question the fund, the manager, the category and themselves.

Small-cap investing is not mainly a return problem. It is an endurance problem.

Size itself becomes a variable

The other invisible issue is capacity.

A small-cap fund is supposed to hunt in smaller companies. But when the fund itself becomes huge, the game changes. It may still perform well, but it cannot behave like a nimble boutique fund forever.

Nippon’s AUM is ₹74,604 crore. HDFC is at ₹38,809 crore. Quant is at ₹31,774 crore. Axis and Bandhan are both above ₹27,000 crore.

This does not mean these funds are bad. It means the question changes.

For a small fund, the question is: Can the manager find winners?

For a very large small-cap fund, the question is: Can the manager still find enough winners at scale without diluting the portfolio into a more mid-cap-like exposure?

That is why the most interesting research is not always in the obvious large names.

Four funds worth studying more closely

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Capex is eating up FCF, This is not going to stop, Meta now expects to spend $130–145 billion on capital this year.

We have seen this film before Zuckerberg has take huge bets with operating cash flow

His last big bet Metaverse by all means of imagination is failed venture at least till now . His next one super intelligence can make or break company

It’s a big investment and it’s a big bet. We see the technology working… My personal bet is that the people who invest in this are going to be rewarded and feel very good over time.

— MARK ZUCKERBERG, Q2 2026 EARNINGS CALL

However the distinction this time is the change to balance sheet, yes META is borrowing and that too aggressively

To fund capex, Meta doing something it had never done as a public company. It is no longer cash fortress. As it now carries $83.7 billion of debt against $90.3 billion of cash, and it is reaching further afield for money this quarter read( data-centre venture with BlackRock)

One thing remain constant, its one best business on earth, Total revenue has jumped from $48B to $60B in a year

The operating margin however is now getting impacted with AI build out

The market is not euphoric about this spending; it is sceptical. It is pricing in a real chance that the hundreds of billions going into AI never earn their keep

From technical on above monthly chart its broken its 10 month EMA and last time when that happened in 2021 price went from 380 to 100

Will the bet pay off?

There were number of call outs made in their Q2 transcript , what I have done is largely organised them in short, medium and long term prospect

Near-term payoff: AI is already lifting the core business

“On a dollar basis, our ads business is reporting faster year-over-year revenue growth than any other company’s reported ad business -- so these AI investments are paying off.”

“9 million small businesses on our platforms are now using at least one of our AI ad creative tools, and we’re rolling out new end-to-end creative solutions that help advertisers translate performance data into their creative decisions. Muse Image is going to supercharge this.”

“Since we rebuilt Meta AI and integrated Muse Spark, we’ve seen a 60% increase in the number of people interacting with the assistant each day and that continues to grow quickly week-over-week.”

“On Instagram, global time spent this quarter grew double digits year-over-year, largely driven by improvements to our Feed and Reels recommendations. On Facebook video time spent increased 9% globally year over year and over 10% within the US & Canada.”

“In Q2, we also advanced our user understanding models to analyze ads and organic activity and simultaneously improve both user experience and advertiser performance. Combined with our GEM model for ads ranking and sequence learning, these advancements generated an 8.3% increase in ad clicks and a 15.7% uplift in conversions on Facebook.”

“Our AI-powered Advantage+ end-to-end solutions continued to grow, reaching over $75 billion in annual revenue run-rate this quarter.”

Medium-term payoff: New products that leverage the same infrastructure and distribution

“Soon, we will have agents that can work 24/7 on your behalf to help achieve your goals and improve your life, your health, your relationships, your finances -- whatever you want. … this needs to be a great consumer product that just works out of the box and is easy enough for billions of people to adopt and use.”

“We made Meta Business Agents available globally this quarter on WhatsApp and Messenger, and there are already more than 1 million businesses using them to talk to their customers or complete sales every week. We’re rolling business agents out on Instagram now too. … Over time, we’d like to build this into a business-in-a-box service that can help you start and run a whole business using Meta’s platforms.”

“In terms of how we will monetize these, we have a mix of subscriptions, volume-based pricing, and I expect that we’re going to evolve more of these products to be like our ad systems where businesses only pay us when we achieve results for them. Over time, that will let us run an efficient auction over our compute, similar to how we do that for our advertisers today.”

“We’ve built our API, we’re rolling out business agents, we’re getting a lot of offers for compute at a significant premium over what we paid for it, and we have more coding and productivity tools on our roadmap as well.”

“We just released our own line of Meta Glasses in collaboration with EssilorLuxottica, including a style that we designed with Kylie Jenner. They’re the first glasses to ship with Muse Spark out of the box so that they can understand what you’re seeing and give even more helpful answers. Early sales have been strong, exceeding our expectations.”

Structural / long-term payoff: Full-stack + distribution moat?

“I think that we’ve definitely shown at Meta that when we have a product in a format that works, I would go as far as to say that I think we’re probably the best company in the world at scaling those experiences to billions of people.”

“We are really a full stack technology company. We built our own data centers, our own infrastructure, our own chips, our own low-level software. … It just seems to me pretty clear that having kind of sovereignty over building your own models is going to be an important part of that stack going forward.”

“I believe that building the kind of full stack model is going to be a lot of the durable advantage over time in how we build personal superintelligence agents, business agents, all these different use cases for all of the different customers that we want to serve.”

How the economics are supposed to work?

“Overall, we expect that a significant portion of our compute is going to go towards training our models, growing our core business, and delivering personal agents and new products. But we also expect to grow a large business serving large customers as well.”

“We believe that there will continue to be a significantly higher margin on selling intelligence rather than selling compute directly. But we think that there’s a big opportunity obviously to sell compute as well.”

“Our current plans are geared towards maximizing 2026 and 2027 capacity. … Longer-term capacity strategy aims to give us the flexibility to continue growing compute in 2028 and beyond by laying down data center and network foundations to accommodate future server decisions.”

“Infrastructure planning remains highly dynamic and even this year, there are a range of outcomes embedded in our outlook.”

“We are today, and expect to be in the sort of foreseeable future, supply constrained, and that really includes our core business, too, where there are -- we still have numerous ROI positive places that we would put compute toward if we had it.”

“AI is improving our core business -- it’s making our apps more relevant, and delivering better results for businesses. We’re starting to deliver more novel products, and we’ll have a lot more there soon as well. We’re investing aggressively because the potential is huge and we know that there are many ways to deliver value here.”

I can do DCF math and tell you fair value of share is $700 or $500 by you using aggressive or conservative assumption but main question as investor you need answer it will Zuck get it right this time?

For me I am interested and tracking

Written by hand typing,

Vivek

The chart of ITC is horror story with lot of crosses

How about fundamentals?

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Twenty or so women sit on a mat. A field officer in a company shirt arrives on a motorcycle. Each woman hands over ₹300, or ₹500, or ₹1,200. The officer marks a register, the group signs off, and everyone goes back to work. Nobody has pledged gold. Nobody has mortgaged land. The only collateral in the room is that these women have to live next to each other for the rest of their lives.

That is the entire technology of microfinance. Not algorithms, reputation, and the Tuesday morning meeting.

Sometime in 2024, in large parts of India, that meeting stopped happening.

The consequences ran to roughly ₹55,000 crore of bad loans by March 2025 — about 14.8% of the industry’s gross loan book, per MFIN’s own data. Two years of contraction followed. Yet outside the sector, in an equity market busy arguing about defence stocks and PSU rallies, it barely registered.

Now the numbers have turned. So the question worth sitting with: are the green shoots real, or is this the same optimism that got everybody into trouble the last time?

Let me try to answer that properly, because the answer is more interesting than a yes or a no.

Part 1: How the fire started

In March 2022, the RBI did something quietly liberating. It scrapped the interest rate cap on NBFC-MFIs and replaced the old rules with a household-income and indebtedness framework. Lend to whoever you can assess, price for the risk you’re taking, just don’t let a household’s loan repayments cross half its income.

It was good regulation. It was also a starting gun.

Capital poured in. Fintechs and ordinary NBFCs, who weren’t classified as MFIs at all and therefore weren’t counted the same way in the industry’s own overlap data, started writing small unsecured loans to the same households. Ticket sizes crept up. The industry grew its book 29% in FY24.

And underneath the growth, three things rotted quietly.

One: the borrower collected lenders. The share of microfinance borrowers dealing with five or more lenders rose to 5.36% by December 2024, from 3.6% in September 2021. That understates it, because bureau reporting lagged and non-MFI unsecured loans often didn’t show up in an MFI’s overlap check at all. A woman could be repaying four institutions and none of the four could see the other three cleanly.

Two: the group stopped guaranteeing anything. As ticket sizes rose and field officers churned, centre meetings thinned out. Officers began collecting door to door because it was faster. The joint liability group the actual credit enhancement in the model became a formality on paper. What was left was unsecured lending at 20–24% with no security and no social pressure.

Three: nobody had ever tested it. The book had grown through a benign patch. There had been no serious income shock since COVID.

Then 2024 delivered one.

Part 2: The break — four shocks in twelve months

Shock one, mid-2024: income. A brutal heatwave, floods in parts of the east, and a general election that pulled field staff and borrowers away from the weekly rhythm. Collections dipped. In a book where the borrower is servicing four lenders out of one income stream, a small dip is not small.

Shock two, August 2024: the guardrails. MFIN, the sector’s self-regulatory body, tightened lending norms — capping lenders per borrower and household indebtedness. In January 2025 came Guardrails 2.0, effective 1 April 2025: a maximum of three lenders per borrower, a ₹2 lakh household indebtedness ceiling now inclusive of unsecured retail loans, and no fresh disbursement to anyone more than 60 days overdue on any loan above ₹3,000.

This was the right medicine and it hurt exactly the way right medicine does. A borrower who had been rolling loan four to repay loan one was now cut off. Rejection rates jumped. Loan originations in Q3FY25 fell 41.7% year-on-year by volume. The music stopped.

Shock three, February 2025: Karnataka. Following a spate of borrower suicides and complaints of coercive recovery, Karnataka promulgated an ordinance carrying jail terms of up to ten years and ₹5 lakh fines. RBI-regulated lenders were formally exempt. It made almost no difference in the field. Word spread that microfinance recovery was now a criminal matter, and collection efficiency for regulated lenders in the state fell below 90%. Karnataka held around ₹60,000 crore of the industry’s book. Tamil Nadu another ₹50,583 crore, roughly 13% of the national portfolio passed its own version, notified in June 2025.

Shock four: the arithmetic. Everything above showed up in the P&L in FY25 and FY26.

CareEdge’s reconstruction of what happened to the loan book that existed in March 2024 is the number that should stay with you: 14.1% of it was written off during FY25, another 3.6% sold to ARCs, 5.4% sitting in Stage 3, 3.4% in Stage 2. By the end of FY26, they estimate total stress touched roughly 30% of the March-2024 book.

Nearly one rupee in three of the pre-crisis loan book went bad.

And the human number, the count of borrowers with a loan outstanding from an NBFC-MFI stood at 3.4 crore in March 2026 down 15.8% in a single year. CreditAccess alone wrote off around 19 lakh borrowers between FY21 and FY26. Those women simply fell out of formal credit.

Part 3: One slide, one whole cycle

The CreditAccess Grameen slide is worth reading slowly, because it is the cleanest picture of a credit cycle you will find in an Indian investor deck. They even label the three phases themselves: Prioritising Collections → Portfolio Maintenance → Portfolio Growth.

Look at the third row and the fourth row and then look at the second row again.

Credit cost went up nearly 5x. PAT went from +₹397 crore to a loss. But pre-provision operating profit — what the franchise actually earns before absorbing losses — fell about 9% and then made a new high.

That is the single most useful lesson in this whole episode. In a lending crisis, the P&L breaks but the franchise often doesn’t. The branches kept operating, the customers kept coming, the spread kept getting earned. What changed was how much of that spread had to be handed over to cover losses.

Which is why the correct question during the panic was never “what are earnings this quarter.” It was: is annual PPOP large enough to absorb the losses without eating into equity, and is the funding line still open? For CreditAccess the answer was yes — they never posted an annual loss (FY25 PAT: ₹531 crore), capital adequacy never fell below 24%, and gearing stayed around 3x. No rights issue, no dilution, no covenant waiver.

For others, the answer was no. Spandana Sphoorty lost ₹1,035 crore in FY25 and another ₹699 crore in FY26, wrote off ₹1,155 crore, saw revenue fall 56%, needed a ₹400 crore rights issue, and breached loan covenants (later waived). Fusion Finance lost ₹1,224 crore in FY25.

Part 4: The green shoots, measured

Now the good news, and it is better documented than most recoveries.

The industry stopped shrinking. MFIN’s Micrometer for the March 2026 quarter recorded the first sequential portfolio growth in seven quarters — up over 3% to ₹3,25,174 crore. Quarterly disbursements of ₹77,524 crore were the highest in seven quarters, though still below the FY24 peak.

Asset quality is back to pre-crisis levels. PAR 31–180 fell to 2.0% in March 2026, from just over 6% a year earlier.PAR 31–90 is 0.8%.

The new book is clean and it is now most of the book. This is the statistic I would put above all others.

CRISIL estimates that loans originated after the August 2024 guardrails now account for around 80% of MFI AUM, and PAR 90+ on that book is below 1%. The problem has largely been written off and replaced.

Lending discipline is visible in the mix. Around 95% of exposure now sits with borrowers linked to three or fewer lenders. Roughly 66% of AUM is to repeat borrowers in their second cycle or later, up from 53% two years ago.

Funding came back. NBFC-MFIs raised ₹77,870 crore of debt in FY26, up 30.9% year-on-year.

Policy turned supportive. In June 2025 the RBI cut the qualifying-asset requirement for NBFC-MFIs from 75% to 60%, letting them diversify a much larger share of the balance sheet into secured and individual lending. In March 2026 the government launched CGSMFI-2.0, a ₹20,000 crore credit guarantee facility covering 70–80% of default losses on bank lending to MFIs, since extended to 31 August 2026.

And the company-level evidence is now stacking up. CreditAccess did ₹340 crore PAT in Q4FY26 against ₹47 crore a year earlier, on 4.4% ROA and a quarterly credit cost of 1.21%. The June 2026 quarter update was stronger still: loan book ₹30,319 crore (+16.4%), record first-quarter disbursements of ₹6,107 crore, PAR 90+ down to 1.5%, collection efficiency 99.68%.

Northern Arc’s rural book tells the same story from a smaller base full-year credit cost down from 6.7% to 4.9%, the March quarter at 1.3%, X-bucket collection efficiency at 99.6%, and Karnataka recovering from 94.5% to about 99.5%. Note what they did with the book itself: cut it from ₹1,500 crore to about ₹900 crore during the storm, then rebuilt to ₹1,009 crore with 84% of it covered under CGFMU guarantee.

Even the wounded are stabilising. Fusion Finance turned a ₹1,225 crore FY25 loss into a ₹14 crore FY26 profit. Spandana posted ₹5.27 crore in Q4FY26 its first profit in six quarters.

CRISIL now expects sector AUM to grow around 20% in FY27, against 4% in FY26. ICRA sees credit costs falling to 3–3.5%.

I think the shoots are real

Part 5: Three things that stop me short of celebrating

First, the scar tissue is still on the books. PAR 180-plus including write-offs was still 16.3% in March 2026. Borrower count is still falling down 15.8% year on year.

So where is growth coming from? Larger loans to fewer, better-vetted customers. Average ticket size rose 18.3% to about ₹61,500.

Sit with that for a second. Rising ticket sizes to repeat borrowers is exactly the right strategy today and it is also precisely how the last cycle began. Every credit boom in history has started as a quality-led recovery. What matters is whether it survives the third good year, when a competitor starts writing ₹90,000 loans and your branch manager’s targets aren’t being met.

Second, the macro that produced this recovery has already turned. FY26 was a gift: inflation near 2%, the repo rate cut to 5.25%, two consecutive good monsoons, borrowing costs falling for every lender in this piece. FY27 opens differently. The IMD’s seasonal forecast is around 92% of the long-period average “below normal” with El Niño returning.

July was forecast under 94% of LPA after one of the driest Junes on record, and kharif sowing was running roughly 23% behind schedule in late June. The Agriculture Ministry has flagged 315 districts at risk, 111 of them with less than a quarter of farmland irrigated.

In June 2026 the RBI held rates at 5.25%, cut its FY27 growth forecast to 6.6% and raised its inflation forecast to 5.1%, citing energy prices and the West Asia conflict. MFIN itself, in the same release announcing the recovery, warned members to plan for a weaker monsoon and the conflict’s effect on rural livelihoods.

Microfinance borrowers are rural, cash-flow-driven, and weather-linked. This is the first monsoon that will actually test the new underwriting. Everything before this was tested against good rain.

Third the banks have not come back. Banks’ share of the microfinance portfolio has fallen to 26.4% from 32.6% a year ago.

CGSMFI-2.0 was designed precisely to fix this, with ₹20,000 crore of guarantee capacity. As of the June 2026 extension announcement, loans of just ₹770 crore had been sanctioned under it. The plumbing exists; the water isn’t flowing.

Misra’s own comment was pointed: the sector has done its part, and it is now time for banks to come forward.

A lending recovery is only as real as the liability side. We need to watch bank funding, not just collection efficiency.

Part 6: Five names, four different businesses

The whole sector is quietly converting itself from unsecured group lending into small-ticket household finance, partly secured. If you’re underwriting these companies on their 2021 identity, you’re valuing the wrong business.

Part 7: What you’re paying for the recovery

The uncomfortable part.

CreditAccess bottomed at ₹750 on 27 January 2025 the same week it reported a ₹99.5 crore quarterly loss. A global brokerage had by then cut its target to ₹564 and called the de-rating structural. Maximum reported pain and maximum analyst pessimism arrived in the same fortnight, as they almost always do.

It is around ₹1,490 today. Roughly a double in eighteen months, against a Dec-2023 high of ₹1,794.

At that price you’re paying roughly 3x March-2026 book and about 30x trailing earnings but those trailing earnings are cycle-depressed, still absorbing FY26 credit costs of 6.8%.

If management delivers its FY27 guidance of 20–25% AUM growth at a 4–4.8% ROA, that same price works out to somewhere in the mid-teens on forward earnings.

The entire bull case sits in the gap between those two numbers. And it requires guidance to be met in a year when the rain may not arrive, funding costs have stopped falling, and the RBI has just trimmed its own growth forecast.

That is not an argument against owning it. It is an argument for knowing precisely which bet you’re making: the operating recovery is evidenced, but a meaningful share of it is already in the price. The easy money the de-rating reversal from distressed to normal has been made. What’s left is execution money.

The lesson that outlives the cycle

Go back to CreditAccess’s ten-year table. Across FY17 to FY26 they disbursed ₹1,37,763 crore, collected ₹1,03,235 crore back, and wrote off ₹4,938 crore net of recoveries.

Roughly 3.6 paise lost for every rupee lent, over a decade that contained demonetisation, a pandemic, and the worst credit cycle the sector has ever seen.

The business works. It just doesn’t work smoothly. Three crises in ten years, four if you count Andhra Pradesh in 2010 roughly one every four years. Anyone underwriting microfinance as a serene 25% compounder is underwriting an asset that has never existed.

The right question was never “will there be another crisis.”

It’s “will this lender still be standing, funded, and taking share when it comes?” which is a balance sheet question, asked years before you need the answer.

Which brings me back to the mat in the village, and the twenty women, and the register.

At CreditAccess, 99.68% of what was due in June 2026 came in on time. It always does, right up until the year it doesn’t. Both of those facts are true at once, and holding both of them in your head simultaneously is the whole job.

Watch the rain in August. Watch whether banks start lending. And watch ticket sizes because that is where the next one starts.

Written July 2026. All figures from company disclosures (CreditAccess Grameen and Northern Arc Q4FY26 and Q1FY27 filings and earnings calls), MFIN Micrometer, CRIF High Mark, and published reports from CRISIL, ICRA and CareEdge Ratings.

This is market commentary for education and discussion, not investment advice, and not a recommendation to buy or sell any security. I am not a registered research analyst. Please do your own work or speak to a SEBI-registered adviser before acting on anything here.

as someone tracking Affle this should be tracked at least annually along with trends

Affle 3i is India's largest listed ad-tech company and a rare global technology platform built from India.

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The diversification engine. Historically Rossell was almost a captive Boeing supplier; today management is deliberately broadening both the customerbase and the end-market base. Two new verticals are scaling fast: semiconductor (wire harnesses for the capital equipment that makes chips — not the chips themselves, a natural extension of its aerospace wiring expertise, >₹10 Cr in its first qualified quarter) and space (harnesses for satellite programs, with a multi-year contract secured in FY26). Management guides the mix to shift from roughly 70% A&D / 30% non-A&D today toward ~50/50 within a year.

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The ADS segment is Sansera’s strategic frontier. It serves Boeing, Airbus, ISRO, and a leading global wafer-fabrication equipment manufacturer. The company has received an initial order of USD 17 million from the semiconductor customer, with a ramp target of USD 30 million within three years, and has committed ₹1.2 billion in aerospace machining infrastructure with a second hangar (₹600 crore peak revenue capacity) planned for H2 FY27. The company’s JV with Nichidai (Japan) for broaching tools and its MMRFIC defence-tech investment (₹20 crore revenue, 40% EBITDA margin) further evidence the strategic pivot.

Revenue mix transformation is underway: ICE Auto has declined from 83.4% (FY21) to 71% (9MFY26), while Tech-Agnostic & xEV is at 14% (up from 5% in FY21) and Non-Auto (ADS) is at 15% (up from 12%). The management’s long-term aspiration is to bring non-ICE revenue to 40% — a goal that is structurally achievable but requires sustained order wins and execution over the next 3–4 years.

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This transforms lumpy hardware revenues (₹800–1,000 per meter, one-time) into sticky long-term cash flows (₹30–50 per meter per month × 10 years). With 9.1 crore meters deployed and targeting 18 crore by FY26, the recurring monthly OpEx revenue building up behind the current project execution is the business's hidden long-term asset.

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Travel Food Services Limited (TFS) is India’s dominant integrated airport food & beverage operator, founded in 2007 and listed on NSE and BSE in August 2025. The company operates at the intersection of two powerful structural trends: India’s aviation boom and the premiumisation of the travel experience. TFS’s core proposition is simple but extraordinarily powerful — it operates the food courts, branded QSR outlets, and premium lounges that every passenger encounters from the moment they enter an airport terminal to the moment they board their flight.

Travel Food Services (TFS) is the structural beneficiary of India's aviation supercycle. With 26% market share in airport QSR and 45% in premium lounges both commanding positions at 13 of India's top 15 airports TFS functions as a near-monopoly in a captive, premium-spending environment. The business model is extraordinary: a deeply negative cash conversion cycle of -427 days means customers (via card lounge access) and airport operators essentially pre-fund operations, creating a structural float of approximately ₹1,975 Cr. As India's air passenger traffic is projected to grow at a ~9% CAGR to 636 million by FY29, and with 70+ new outlets under construction at upcoming Navi Mumbai and Noida airports, the runway for compounding is substantial.

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Peter Lynch, who coined the idea in One Up on Wall Street and spent most of Beating the Street refining it, would wince. The mall walk, the test drive, the dinner at the new restaurant — these were the first page of his research process. People treat them as the last.

Beating the Street is half memoir of Lynch’s thirteen years running Fidelity Magellan, where he compounded capital at roughly 29% a year and turned a sleepy fund into the largest in the world. The other half is a manual: how to think about stocks if you are not paid to think about stocks for a living. The book is over thirty years old now. Some of it has aged into wisdom; some has aged into wallpaper. Both halves are worth understanding before you quote him at a dinner party.

The original sin in “invest in what you know”

What Lynch actually argued was something narrower than the slogan suggests. His claim was that an alert person — a nurse, a plumber, a mall manager, a teacher — often spots a great company several years before Wall Street does. The doctor who notices a new device transforming surgical outcomes, the regional manager who watches one supplier eat a market, the parent who sees their kids buy three colours of the same toy.

That edge is real. The catch — and it’s the entire catch — is that spotting is not owning. Lynch’s process after the spot was unromantic: pull the annual report. Read the footnotes. Compute the price-to-earnings ratio. Compare it against the growth rate. Look at debt. Understand who the competitors are. Try to talk to the company. Decide which of his six stock categories the business belongs to. Then ask whether the market already knew everything he knew.

Almost nobody does this. The slogan got reduced to “buy the brands you like,” and an entire generation of retail investors believed they had the master’s permission to skip the homework.

The most poignant evidence sits at the back of Beating the Street itself. Lynch tells the story of a class of seventh graders at St. Agnes School in Massachusetts, who built a model portfolio that beat the S&P 500 over two years. The internet still trots out this story as proof that even children can pick stocks. What gets left out is that the kids did written research reports on every holding. They had a teacher who insisted on a clear story for each pick. They had no career risk and no mortgage. They were, in other words, doing the homework most adults skip while invoking their name.

Lynch’s idea was never that ordinary observation is enough. It was that ordinary observation, combined with a few hours of unglamorous reading, is plenty — because the average institutional analyst is too busy modelling next quarter’s earnings to look up from their screen.

What Lynch got right, and is still right about

Set the slogan aside. The book has at least four ideas that have aged remarkably well, and one or two that may matter even more in 2026 than they did in 1993.

The two-minute story. Lynch insisted that for every stock you own, you should be able to explain — in roughly two minutes, in plain language — what the company does, why you own it, what would have to happen for it to make money for you, and what would tell you that you are wrong. If you cannot do this, you do not own a thesis; you own a ticker. Most retail portfolios fail this test on the first stock.

The six categories. Lynch refused to think about all stocks the same way. A slow grower (utilities), a stalwart (a Coca-Cola or HUL), a cyclical (a steel company), a fast grower (a young consumer brand), a turnaround (a wounded company that may heal), and an asset play (a holding company trading below the value of what it owns) all demand different questions, different time horizons, and different reasons to sell. Treating a cyclical like a stalwart is how investors lose money for ten years and then declare the market irrational.

The macro is mostly noise. Lynch’s contempt for economic forecasting is healthy and contagious. He thought the average investor would be better off ignoring interest-rate predictions and unemployment numbers entirely and spending that time reading one extra annual report. Three decades of academic data on macro forecasting accuracy has, gently, agreed with him.

Boring is beautiful. A company with a tedious name, in an unfashionable industry, doing something so dull that the average analyst will not cover it, can be a wonderful place to find mispriced assets. Garbage hauling, fastener distribution, niche packaging — Lynch found tenbaggers in places no Goldman analyst would risk their reputation visiting.

Diversification is not safety past a point. Lynch’s word for it was diworsification — the tendency of investors (and managers) to keep adding holdings until they have so many that no individual win can move the needle. Twenty-five well-understood positions are far safer than seventy half-understood ones, even if a textbook says otherwise.

Where I would be careful

Now the honest part. Three things in Beating the Street should be read with one eyebrow raised.

The first is the survivorship problem. Lynch’s record at Magellan is one of the most extraordinary in the history of public funds. It is also a sample size of one. Many people who tried to imitate his approach in the 1990s and 2000s ended up underperforming the index, sometimes badly. The book reads as if anyone who follows the rules will do well. The data, including Fidelity’s own subsequent performance after Lynch left, suggests that the structural advantages he had — a small fund early on, a still-inefficient market, an army of in-house analysts, and his own particular gift for synthesis — were doing more work than the rules alone.

The second is the dated industry advice. Two whole sections of the book are dedicated to S&L thrifts and to mall-anchor stocks. Both went on to suffer brutal collapses (the 2008 crisis flattened the thrift sector; the slow death of the American mall has been a generational story). Lynch was right about those companies in those years. He was not making a permanent claim about those industries, and readers should not borrow his enthusiasm for their own time.

The third, and most uncomfortable, is the rise of indexing. Since Beating the Street was published, decades of evidence — most associated with Jack Bogle and Eugene Fama — have shown that the great majority of active managers, including very good ones, fail to beat the market net of fees over long periods. Lynch’s book is not wrong about this; he openly says most fund managers do not earn their keep. But he assumes the alternative is a smart amateur picking stocks. The honest alternative for most people, today, is buying a low-cost index fund and going for a walk. Anyone reading Lynch in 2026 should hold both ideas at once: yes, you can beat the market with research and patience; no, the base rate says you probably won’t.

What this means in real life

If you are an ordinary investor reading Lynch for the first time, here are the actionable bits worth keeping.

Do the two-minute test on every stock you currently own. Not in your head — out loud, to a friend who is not in finance. If you stumble, sell.

Categorise before you analyse. Decide which of Lynch’s six buckets the company belongs to. The questions you ask a fast grower (can revenue keep compounding?) are not the questions you ask a cyclical (where are we in the cycle?) or an asset play (what’s it really worth in pieces?).

Use observation as the first filter, not the last. If your daughter loves a new app, that is a hypothesis, not an investment. The work begins after the hypothesis.

Concentrate where you have an edge; index where you don’t. Most professionals run too many positions. Most retail investors own too few quality ones and too many lottery tickets. Lynch’s portfolio had thousands of names because he had a hundred analysts; you do not. Ten to fifteen carefully chosen positions, plus an index fund for the things you don’t understand, is closer to the spirit of his book than a brokerage account full of “stocks I heard about.”

Ignore the macro talk. Spend that time on annual reports and conference call transcripts.

Be honest about your edge. If you cannot articulate, in one sentence, why you know more about this company than the market does, you do not have an edge — you have an opinion.

The closing case

Peter Lynch is one of the few investors whose record almost demands that you read him. But he is also one of the most misread. The damage done by the half-quoted “invest in what you know” — the pile of retail portfolios stuffed with brands their owners liked but never analysed — is probably larger than any individual benefit the line ever produced.

Read Beating the Street the way Lynch wrote it: as a book about work. The mall walk is a hint. The annual report is the job. The two-minute story is the test. If you cannot stomach the work, do not borrow the slogan; buy the index, and use the time saved on something you actually love.

Inventurus Knowledge Solutions Limited operating under the brand IKS Health is a technology-enabled healthcare services company incorporated in 2006 and headquartered in Navi Mumbai, India. The company listed on the NSE and BSE on December 19, 2024, via a 100% offer-for-sale IPO at a price band of Rs 1,265–1,329 per share, with no fresh issue component. The business model is built around a Care Enablement Platform that takes on the administrative, clinical, and financial burdens of US physician enterprises, allowing clinicians to focus on patient care rather than paperwork.

The company serves two primary care settings: outpatient (physician groups, multi-specialty medical groups, academic medical centers) and inpatient (health systems, integrated delivery networks, large hospital complexes). The October 2023 acquisition of AQuity Holdings for approximately $220 million (Rs ~1,800 Cr) was transformative AQuity had historically specialized in inpatient clinical documentation and medical coding, while IKS’s core strength lay in outpatient revenue cycle and clinical documentation. Together, the combined entity now supports approximately 155,000 physicians, or roughly 18% of all practicing physicians in the United States.

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