Hi
True. Agree with you that in this game recovering market share will be perhaps difficult. LaOpala I believe is not spending much on advertisement whereas the Borosil Management in every call has highlighted the willingness. I could not join this quarter’s call due to time constraints nor have I read the transcript yet. @Marathondreams would have a better idea. As per previous calls Borosil management has said that the market itself is growing and that is what they are liking.
The stark reality comes when we see the below chart.
I don’t have access to operating margin of Borosil’s consumerware business so I had a look at the equivalent PBT margin. Point is to note the graph from April 2018 onwards.
This quarter LaOpala has lost a mammoth 9.3% since Q2 in OPM and 4.3% YoY. On PBT margin terms Borosil Consumerware has almost doubled its margin since Q2 and remained flat YoY. LaOpala has also remained flat on PBT Margin terms YoY but has lost a significant 5% over Q2 on PBT Margin.
So I doubt their margin is getting protected.
To capture market share one must be willing to spend/reduce margins (in this case), to regain market share is an uphill task not only in terms of spending money but replacement costs for already acquired consumers.
Rgds