Hi, I am new to this forum and have a major vested interest in D-mart having more than 50% of my portfolio in it. As it has been mentioned before in this thread, I too am mentally ready to sell this stock 20% or maybe 30% lower than its high. However, on separating the business from the stock, I am seeing D-mart get the kind of dominance that Wal-Mart had once upon a time in USA. My friend works for a company that sells probiotic drinks, and he supplies it to other stores at 54 while the MRP is 60 (being a diary product the margins are on the lower side). However, D-Mart arm twists him to get the same product for 44 bucks wholesale price. This is because of the size of their orders and the prompt payment within 7 to 10 days which no other retailer does.
So the share might be highly extended in knowledgeable opinion, but the company is now in a dominant position to call the shots with the manufacturers. Today it is able to arm-twist a small manufacturer of probiotic health drinks, just imagine its muscle and heft when it reaches 500 or maybe 1000 stores across India however late that may be. It will be able to bring the big FMCG companies and even be able to procure direct from farmers in quantities and purchase costs justifiable enough to store and transport these perishables.
My entire point being, we are already seeing dominance over suppliers which could only grow in the years to come. Would definitely appreciate inputs from the other respected members of this forum. Please enlighten me if my hypothesis is right