That 01 negative review on amazon might be from @valuestudent :)
What I feel is - at times, we worry more, much more than the management or the marquee investors (lucky to have spend 2 hours with Mr. Vijay Kedia)
I am sure all here are the ‘value’ investors and followers of the Buffets and the Mungers of the world. And they say invest in good management. So I guess all of us must have followed that while investing in Repro.
So now the onus is on them to deliver.
That 01 negative review on amazon might be from @valuestudent :)
Interesting interview on Bloomber Quint. The current run rate has now reached 4000 books per day. And by next year the capacity will go up till 16000 to 20000 books per day. The company is also adding machines for color book, which again is a high margin product. The interview in on bloomber quint but I am unable to copy the link. Will update soon.
Didn’t understand why are they building warehouses? He mentioned it would be cheaper. Wasn’t the idea- at a scale on demand would be cheaper?
here you go…
Disc: Not Invested
let me try to explain the reason for warehouse: say repro uploads a book from Ingram on Amazon for print on demand. Soon in a day or two they realise that they are getting 100 orders everyday for this product. It would make sense for repro to go for Offset printing rather than pod. In offset, cost Per book goes down with every additional book getting printed. Only issue with this strategy is having correct estimation of demand.
In my opinion, this is the right strategy. It is important for repro to get market share for front end titles in a meaningful manner. Also, they might be getting good analytics from Amazons data on order flow. So it is correct to take advantage by having a warehouse.
let me add my key take away: Passing on the paper price fluctuations to the publishers.
I see two positives:
1 As Mr khera explains that cost benefit and highlighted by you Kunal. You being from industry validating inspires confidence
2. Getting in a situation where one needs to do demand forecasting highlights bulkness of demand and may be demand to some key books ( Pareto) where supply chain efficiencies can come in. This within 4-6 quarters is a very encouraging sign complimented by expansion plans
Also, reminds during one of concall Mr khera had said with regional centers , time to deliver will reduce and hence better customer share of mind which will hopefully convert into better revenue
Neverthless, all these expenses , capex n run rate type KPIs need to be tracked closely
I have few questions 1) what would be the utilization when the capex is done for 16-20k books per day? and how much is the utilization now.
2) why are they still not talking anything on the margins? :-/
@Kuldeepjadeja Now you are invested so stay calm. No need to follow price unless you want to add more sometime after the sell off sometime in the future. It is a good stock with a good future. It will not go up everyday for everyone’s satisfaction.
@btunuguntla could you tell me the date? Else, don’t make yourself believe that recovery will be in one day or one month or one year. Just saying.
Guys, show some maturity & stay away from posting one liners or asking novice question on price movement. Let us not waste precious space of the forum.
I feel like its high time I give you some insights. This business is within my circle of competence. I come from a family that has been in the print business for a very long time. Paper cost is majority of the cost involved in printing. Margins in the business should be close to around 7-10% net for their bod. There are unknowns in this case for eg. Royalties, their agreements with amazon, ingram, marketing cost for the title etc:. They wont fall below 5% worst case. In certain cases margins could past 15% depending on the title. I think it is safe to assume a 7-10% net, as finance cost is nothing for their bod model. The old business should post decent numbers going forward as operations stabilize. All in all a good story, but a rsiky story because it is a new business…It is prudent to wait and average up as fundamentals improve. Forget about the price of the stock in the short run.
Can a whole time directors wife remain in public holding ? As i have observed the same in this case in sep’17 holdings.
Bharti Airtel - Interesting Acquisition
Acquires strategic stake in Juggernaut Books
Digital Platform to read high quality affordable books
Juggernaut has 5000+ titles by Authors like - Twinkle Khanna, Rajdeep Sardesai, Arundhati Roy etc.
Airtel acquires strategic stake in Juggernaut Books , a popular digital platform to discover and read high quality, affordable books and to submit amateur writing.
Co says move is in line with Airtel’s endeavour to build an open content ecosystem & bring world-class digi content.
The investment from Airtel will enable Juggernaut to ramp up content acquisition, digital marketing and prepare for a subscription offering launch in the next few months.
Repro are in the physical book business. Juggernaut are into the ebook business. 5,000 titles is chump change compared to Repro. Depends on what story you believe in. Even accounting for ebook penetration the market for physical books is untapped and repro can take over this market. Thats what all investors are betting. In the future should the ebook take over, Repro are well poised to take on that opportunity as well. In developed countries itself physcial books have not been affected too much…
Guys please answer my below questions (very eager to know):
- Cost of materials has increased by more than 7 crores qoq where as top line is flat, is it due to change in paper prices? but the management said the rise in paper price will not be of significant effect, but 7 crores is significant.
- Why the finance costs have gone up again (almost by 15%) both qoq and yoy, in spite of reducing debt :o
- They have added the 631 lakhs in other expenses (amount recovered from the debtors), they are saying that it will be contingency fund, will this be shown as cash on books at least?
- If we check last year q2 result it is 5 crore loss, they are showing it as 17 crore profit in results and presentation today :o is this negligence or am i missing something.
I’m personally very happy holding a satellite position of 2% in Repro India. Once the fundamentals of the business improve coupled with some certainty of their bod business. And mgmt starts making things simpler for us I will increase allocation to 5%. it is way too expensive. I entered at around 500. I see huge potential in the bod business. But I will happily take my money out if we start getting too close to the 1000rs mark too soon. Vijay kedia being super bullish on them is a comforting factor. Another comforting factor is that mgmt seem focussed on driving up valuation above all else…
Someone being bullish is comforting?
Management focussing on mcap is not a great sign. Management must focus on the business and must keep away from mcap games.
At the end of the day you must know what you are betting on. This is why I have only a 2% position. Vijay Kedia buying again at 675 along with malabar fund is a comforting factor in the sense that it makes sure that investor and mgmt intentions are aligned. We all want Repro India to succeed and capture the market that they are chasing. Assuming they do a 10cr pat you are paying 100x for them. In my eyes the true value of the business taking into account future growth is 400cr max. They need to rectify their old business. None of us know whether the new bod business is posting a profit or no. Agreed mgmt shouldnt be focussed on mcap. But at the end of the day it is obvious that Repro are chasing growth and valuation. Otherwise they wouldnt have raised money. There are only a handful of businesses that you buy and hold for life. Repro India is certainly not one of them. If the story plays out they could make us alot of money. But current valuations and business risks are too much. Waiting for fundamentals to improve and averaging up seems prudent. End of the day we all make money only if market cap goes up. As long as we make sure that we bet on growth, strong mgmt and decent cashflows we will all make good money. Management want to grow quickly and none of us will complain if Repro drives up valuation. If you want to talk about fundamentals Repro should not be valued more than 450cr in my eyes best case. In which case almost everyone has overpaid for Repro India. So lets no sit here like angels, none of us are complaining about the fact that the company is super expensive at the moment. If Repro was to become a 6000cr company simply by selling a wonderful story, none of us would complain, we would happily ride the journey and exit along the way…
I do 100% agree with your points. But we must know what we are betting on.
Very good questions. I am especially interested to understand why they are showing a profit of 17 crore for Sep 2016 when each and every report published a loss of 5 cr last year.