I want to understand that managment says , the competitive intensity is very high , well that was the case earlier also.
From where suddenly, the new competition is coming in ?
Debt 2023-164 cr
Can you elaborate on the promotor group transactions?
He might be playing Peter thiel’s strategy here. Just to showcase the world that we are not getting economic profits and the competitive intensity is high. I might be wrong, but this seems to be a case
A monopoly usually pretends that we are in a perfect competition and no producer surplus is there.
Disc- Invested.
Abnormal volume and sudden heavy selling in last minutes of trade yesterday! Price fell as low as 840 before recovering!! is there a way to find out who sold in panic?
VLS entities sell a month before when they expect a bad qtr.
If implemented as planned this could be game changer for relaxo!
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Can it be beneficial for Relaxo, Campus and other Indian players
(Footwear Industry: Imported luxury shoe brands trip on delayed BIS nod for sourcing units, ET Retail)
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Dr. Vijay Malik analysis of Relaxo
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Friends,
After going thro the above analysis , few points stand out
- Lack of pricing power
- Heavy competition
- Slow move to Premium
etc
A few other from my notes notes:
- Promoters have increased their holdings a bit during 2023
- Next 2 yrs capex already built - current util 65% only
- Valuation staying high even through these down times.
- No of pairs sold is reducing, OPM reducing.
- My assessment of management over the few calls is that they are very reluctant on price increase (risk of losing shelf space and visibility to customer)
Am thinking what are the triggers for upside - Do any of you see any ideas or found something that can be potential for upside
Capex/Volume?
Premiumization
Any issues getting resolved e-.g. inventory, raw material, Systems implementation
Any potential for optimization/efficiency-margin improvements?
Whats the scope for growth - is it linear (based on population and geo expansion ) or any other triggers?
Thanks for your thoughts in advance.
Disclosure: Invested in parts from last 3 yrs starting from around 650 to 1000+. Avg 900. Almost flat.
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Stock trading at absurd valuations. The only trigger which can create some opportunity for Relaxo could be the BIS which has been implemented from January 1st 2024. If this standard helps to erase un organized competition from the market, i think Relaxo can gain from it. With double digit volume growth & market share gain, we might see operating leverage play.
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Good point. Thanks for the info