The company is already garnering nearly 300 cr revenue. 500/600 cr market size too less considering competition. What am I missing, where is the opportunity size?
Big question & seems the likely reason of muted topline growth in recent years.
I understand that major players in opalware look towards following opportunity
- Projected 20% growth in overall market size
- Penetrating in middle / lower middle class houses
- Expected shift from steelware to opalware with increased cash in hand
The recent SHP filling shows promoter group increasing their holding from 65.33% to 65.64% in last quarter.
https://www.bseindia.com/corporates/shpSecurities.aspx?scripcd=526947&qtrid=103.00
I see the inventories and receivables keep going up. Anyone knows if there are issues on selling their products?
There are few interesting changes happening in share holding pattern in last week, it assumes more significance as these are taking place just before Q3 result, which has been best quarter historically. One of main competitor Borosil has declared results and I donāt see any major boost up in the segment where it competes with Laopala.
Coming back to exchange in share holding pattern, one of trusted long term investment firm āJwalamukhi Investment Holdingsā has sold 40 Lac shares & reduced their holding from 6.727% to 3.124%. As they made exit we saw another big MF House namely HDFC Mutual Funds have bought 3.43 Lac shares and increased their holding from 4.93% to 5.24%. This scrip has been silent w.r.t. such activities & a old ally trimming their position with a big MF house increasing their holding gives fresh puzzle for retailers to solve and review their investment decision.
HDFC Mutual Fund didnāt have much holding during the last quarter. They have bought the shares from Jwalamukhi, Westbridge and from the market to go from close to 0% to 5.24% in January. So there has been a transfer of shares from Jwalamukhi/Westbridge to HDFC
Mathematically HDFC gained 5.24% while JIH (Westbridge) sold 3.604% and it leaves a big gap of 1.636%? Any other exit is reported or its retailers selling out with recent upswing in the prices after continuous fall
3.6% was a direct transfer apart from that HDFC MF bought 700000 shares at Rs190 in a bulk deal on 28th Jan seller is not known, this information is there in BSE site
Board to consider INTERIM DIVIDEND in next meeting on 14th Feb. As they are planning interim dividend for the first timeā¦ any guess / links with recent changes in DDT.
Linked to DDT I think. If they pay it after March most of the promoters have to pay 30% plus tax vs 20% DDT before march
Decent set of numbers given that we are in the middle of an economic slowdown. Even though revenue growth over the last few years has been tepid the business has shown resilience during one of the worst periods the country has seen at least in terms of nominal GDP growth. This is in contrast with even established names like Page which has seen a sharp decline in profit. Apart from financials there are not many companies that are compounding at 20%, so companies which are consistently growing at high single to low double digit rates are getting great valuations (upward of 50 PE). In other words market is rewarding consistency of growth as much as quantum of growth. Forget big brands like Nestle and HUL just look at the valuation of Relaxo. Despite several headwinds over the last few years (Demon, GST, increase in competitive intensity and slowdown) the company has grown profits (not revenues) at a decent rate. Also adoption of IND AS has impacted revenue growth adversely. Going forward if the company can show consistent growth of 10-12% for a few quarters it will be strong candidate for a re-rating
New clause:
āTo carry on the business of providing information technology,data processing,support service for software and hardware,support service for storage,disaster recovery and enterprise resource planning.ā
Anyone knows what is this and why it is for? Is it not unnecessary and opening route to future fund (mis) allocation than core business?
I hope this is related to the internal IT systems of the company after the implementation of SAP of last year. Object of MoA can include ancillary activities such as IT that support the core activities. Anything other than that I will be concerned
does anyone feel this is a structural slowdown for the company, given the best growth days they had were during the five year import inti dumping on china and other countries, since the lift their growth seemed to have chocked, trying to figure out if its the economy of the influx of importe substitutes .Any views ?
I could be wrong here but I feel they are losing their market share to their aggressive competitors like Cello and Borosil. Growth of Borosilās Larah division is in double digits for last many quarters whereas La Opala is struggling to grow its topline in spite of adding capacities and having good margin profile (much better than its competitors). I feel they are getting complacent being the market leader as I neither see much sales promotion efforts nor any new innovative product introductions in the market.
Disclosure - interested but watching. investor in Borosil
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I also think it was a question of capacity they havenāt added a lot of capacity the last 2-3 years whereas Borosil and Cello both added. You canāt advertise heavily, then create demand and not have the capacity to fulfill the demand. Now the opposite might happen La Opala has significant expansion plans (50-60% increase by Jan 2021) while Borosil hasnt announced any plans (Not sure about Cello). So you might see La Opala getting aggressive this year and Borosil going slow because they are going to have a capacity constraint. Also I think all the competitors are quite sane and donāt want to add capacity at the same time putting a downward pressure on prices. I read Borosil talking about this
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I think the anti-dumping duty on Opalware products from China was extended in 2017 for 5 years. Also in this yearās budget custom duty for all tableware products was increased from 10 to 20%, this should favour all the players in the industry
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Are you sure its in double digits for Larah? for 9MFY20 sales is up 4.8% vs. 9MFY19. There was one off order from āMoreā retail worth 25cr which led to spurt in growth last year.
Exactly. If you remove Rs 25 Cr from YTD Dec 18, the growth on like to like basis for 9 months ending Dec 19 comes to 32%! Growth for full year FY 19 vs FY 18 was 41.8%. So even after removing 25 crores from it, growth for FY 19 would come to around 16% (ref investor ppt for Mar 19 and Dec 19 )