Just on employees part your assessment should include processing charges paid to Kitex .if you combine then then employees cost are around 23 % which is same as SP parallel alhough SP is not that efficient and not so backward integrated.
on high Kitex USA please understand kitex USA stands as wholesaler in US (think Gerber ) and also front ending kitex branded which will carry invent which they are selling on Amazon as well which will increase inventory. They also have Toy r us inventory which came up in Q4 and it was surprise for all players in Q4.
Second order effect of Toyrus will be they will reduce volumes from Gerber and carter.
Kitex USA need to be audited as per US rules.
None of this is confirmed by management but this what i have figured out from AR and data available.
I have big question is my partner fraud (Sabu Jacob ) or he is stuck in problem . Till now i dont have data of fraud.
People who have not been in sales or have handled business talk lot about corporate governance,
life is not very simple . believe me best guys in India also manipulate numbers q4 to q1 shift expenses , recognize revenues before to show q by q growth.
If you read above i am not comfortable riding with Sabu but i want to believe in data than just emotions or have not go data or motive for him to commit fraud (power of incentives ). Did he commit this fraud to take out more money as salary (he earns more if declares more profit ) so that he can spend more on village or was he interested in making money through shares ( be bought 9 crs of shares , his brother also).
If Sabu is fraud then he will be very very different kind and i will get very expensive lesson.
I did not give expensive valuation to Kitex nor did i think they have any moat etc. I treated that like any other textile company but very focused and with good execution . They have series of challenges Jockey then Toyr us .
I have written to Sabu Jacob but not received any response yet. If we dont get response we should check what are legal recourse available with SEBI etc. Let me know through direct email options available have not researched this option.
As Mohnish Pabari said that you learn more about company when it goes down 50 % and you concentrated bet. If you hold 0.5 % of your net worth then it makes no sense to spent time and people take data at superficial level and comment like experts.
The other thing i am bit pissed with these big investors giving theoretical gyan from Munger etc but will not stand up against these companies ( they have so many resources ) to make it India better . If none of us stand up then frauds will continue . USA was not like this its people (investors ) who made these fraud coporates shit in pants.
Dis : invested 6% so heavily biased now down 60%.