Quality & Compounders
Sajal Kapoor — Capex Deleverage Recovery is a Quality & Compounders screen. It checks every NSE-listed stock against 4 conditions computed from nightly data, after excluding heavily pledged promoters and very small market caps. This page explains the rule, each figure and its source. It lists no stocks and is not advice.
The Sajal Kapoor capital cycle thesis identifies one of the most reliable but least-followed return patterns in Indian equities: the recovery after a heavy investment cycle. When a business invests aggressively in fixed capacity — building a new plant, commissioning a refinery, expanding a terminal — its fixed cost base surges before revenues catch up. The market, pricing in the debt load, equity dilution, and depressed margins, sells the stock aggressively — often 50% or more from peak. But this fear is frequently wrong at the inflection point. Once the asset is commissioned and volumes ramp up, the same fixed cost base that was a burden becomes a competitive moat: competitors face years and billions to replicate it. EBIT margins recover not gradually but sharply, because revenue grows on a largely fixed cost structure. The three-step pattern — identifiable capex cycle, steep correction from peak, and now-recovering EBIT margin — signals that the market's fear has already been priced in and the operating deleverage is turning. The investor blind spot this addresses is timing: value investors find these stocks too early (before margins bottom) and momentum investors miss them entirely (they look like broken charts). The screen finds the inflection.
A stock must satisfy every condition below. Conditions are grouped under the pillar they test.
Capex Cycle Identification
Market Correction (Fear Priced In)
Margin Recovery (Inflection Confirmed)
Hard excludes
Ranked by Fixed Assets Growth, Prior Year, highest first.
Fixed Assets YoY Growth (%)
((net_block_latest_yr / net_block_prior_yr) - 1) * 100, where net_block is tangible fixed assets (property, plant and equipment) net of accumulated depreciation, from the balance sheet.
Must be above 15% in at least one of the past three years to confirm a material capex cycle occurred. Fixed asset growth is used as a capex proxy because it reflects the cumulative asset base growth after depreciation — a company growing fixed assets >15% YoY is adding major capacity, not just maintaining existing plant. The absolute growth in crores is surfaced alongside the percentage to help the analyst assess scale relative to the company's market cap.
High is better
% Below All-Time High
((all_time_high_price - current_price) / all_time_high_price) * 100. A positive value means the stock is below its all-time high; a value of 0 means it is at its all-time high. The all-time high is computed over the full price history available.
Low is better
EBIT Margin YoY Change (pp)
(ebit_margin_latest_yr - ebit_margin_prior_yr) in percentage points, where ebit_margin = (EBIT / revenue) * 100 for each year. EBIT = revenue - operating expenses - depreciation (derived as profitBeforeTax + financeCosts from FinEdge income statement).
High is better
Type hypothetical values to see which conditions they satisfy. These are not real stocks and nothing here is stored.
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How many stocks pass if this threshold were set differently. Counts only; no stocks are named.
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We have not measured this screen yet, so there is no record to explain.
This is a historical, statistical measurement produced by FINOME TECHNOLOGIES PVT LTD's research harness on past data. It is not a prediction, and past results do not indicate future results. The universe is today's Nifty 500 constituents, so the sample is affected by survivorship bias. It describes how a screen's selections behaved in the past and does not constitute investment advice or a recommendation.
Rule version 1.0.0