On Rupa:- I agree on that part but many of them failed to see cash flow of their business which has turned negative all their money is getting stuck in working capital i.e Higher Trade receivables & higher inventory, to me this is a red flag if sales are increasing but not increasing cash flow instead it’s turned negative. We should avoid the bias that some big investor has bought the shares because it’s a blind vision we avoid checking risk. Also, if the company is so good why the stock hasn’t performed since jan-14 the stock is hovering around same range bound, If it is a gem can’t be hidden for so long specially in this bull market & where there is lack of information arbitrage.
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very true , and after that big investor entry , the share has made top and its down by 50%
In Aug 22 concall the management said
As I said, the yarn prices look stabilized now and it should rather pick up from these levels, we
are quite hopeful and as the prices are stable once it start picking up demands will also pick up.
Can someone please explain why this would happen? Shouldn’t it be the other way round that : when demand picks up the yarn prices should go up?
It means Rupa & Company is expecting demand for yarn to pick up once prices stabilize. This is because when prices are volatile, businesses are hesitant to make large purchases, as they don’t want to be caught out if prices go up further. However, once prices stabilize, businesses are more likely to start buying yarn again, which will increase demand.
In addition, when prices are stable, it is easier for businesses to budget and plan for future purchases. This can also lead to increased demand, as businesses are more confident that they can afford to buy yarn.
Here is an example of how a price increase in yarn can affect the cost of inner garments:
- Let’s say that the price of yarn increases by 10%.
- This means that the cost of making a pair of inner garments will increase by 10%.
- If the original price of a pair of inner garments was $10, the new price will be $11.
As for your question about whether demand should go up when prices go up, the answer is not necessarily. In some cases, demand can actually go down when prices go up. This is because consumers may be less willing to buy a product if the price is too high. However, in other cases, demand can go up when prices go up. This is because consumers may perceive a high-priced product as being of higher quality.