Shankara Build Pro - Building Materials Organised Retail


(kanvgarg123) #41

I think it is at a stage where they won’t have to take much debt to expand. This is ideally the best place for a retail company to be since it results in margin expansion and topline growth. 3 years down the line, if they are prudent enough to manage their expansion with debt then we may have a multibaggar here. I bought once at 1000 but I couldn’t buy because of valuations later on.
What is the meaning of 1500 Price point Jargon?


(Mayank Narula) #42

“Shankara Building Products opens its 122nd store | [29-Nov-17 18:25 Hrs IST]
Shankara Building Products announced the opening of its 122nd store under the ‘Shankara Buildpro’ brand at Jawahar Autonagar, Vijayawada - 520007.
The store admeasures ~2,250 sq.ft. and houses a diverse basket of product offerings.”

So this is the event which fired the stock today :stuck_out_tongue:
On serious note, may be due to ~80% illiquid float (promoters and mutual funds), huge demand is making stock go in one direction only. With free float of 44 lacs only, days like today of 7-8 lac volume will easily take stock up 10% or more even.

Company has published earning call transcript on BSE. Link: http://www.bseindia.com/corporates/anndet_new.aspx?newsid=0d8736c0-2d44-4fb0-935e-6e22495ef9e7


(Value Seeker) #43

There seems to be lot of exuberance in this stock and in the market overall. Maybe Shankara will become the Walmart of building materials…BUT only time will tell if the moat will sustain.

Disclosure: Not invested


(Anirudha Limaye) #44

Just a quick reply to the understanding that I am comparing it to Home Depot. That isn’t what I said at all, if you read carefully. I said, foreign fund managers will compare it to HD, because I believe it is the closest comparable that will pop in their minds in order to relate this stock to what they understand. To that effect, they will next start looking not at Shankara the company, but Shankara the opportunity vs. the potential. I remember, an talk by Shri Ramdeo Agarwal where he said he thought Asian paints was expensive at 20x PE, when he reconciled himself to buying at 20x, it had become 30x and when he reconciled to that it had become 45x. Whether Shankara does it or is a complete failure I dont know at this point. I of course believe it will, but merely writing to re-clarify what I had said earlier.


(Value Seeker) #45

Sorry if it came across like that. My point was towards the larger trend on the comparison that has started between companies listing in India vs. in the US and the overall frothiness of expectations.


(Amit) #46

123rd store opened.

http://www.bseindia.com/corporates/anndet_new.aspx?newsid=9a8e8811-e5ad-47d8-9abe-ae0bec22fa65

The store admeasures ~8,399 sqft. and houses a diverse basket of product offerings.

They are right on track, kicking some storm :slight_smile:


(madhavikkutti) #47

11 stores got added in just the last 3.5 months. I think, they are running much ahead of their set target of 15-20 stores per year. Also, the latest store added is much bigger in size than their average store size of 3728 sq ft :slight_smile:


(madhavikkutti) #48

(phreak) #49

Down 16% today and 19% from highs. So that 58% up in two weeks is now reduced to 28% up in two weeks in a single day. Has been the sad state of storied stocks this year, driven by hot money, momentum and moneycontrol. Especially the new ones on the block - Advanced Enzymes, CDSL, AU Small finance bank, Shankara have all gone through the same cycle of boom and bust. Avenue Supermarts has perhaps been the exception (so far at least). Apex Frozen Foods is following a similar path. I think the clock is ticking there as well.


(manivannan.g) #50

May be “time bomb” to be precious :slight_smile:

I was talking to a friend about Shankara, though it’s a good company but it’s running way too high from the basics. So I just backed out myself.


(Mayank Narula) #51

I entered into this stock at 1500 less than a month back and would have been perfectly fine with stock at current level (around 2000) even 6-12 months down the line. But the way stock moved, I was kind of uncomfortable. However, with 16% fall in one day, I am even more uncomfortable now!! Investing is nerve wrecking as hell.


(madhavikkutti) #52

(gautham1) #53

So many BSE notifications on opening a new store in the recent past!


#54

The fall looks similar to Avanti feeds during 10th and 15th November. Such type of gyrations are part of life where prices move very fast due to very high expectations. Avanti fall during November came despite outstanding results and Shankar’s fall came about without any significant news flow. The people who did not sell out Avanti are enjoying the rise again. I think it is only matter of time Shankara exhibits stability and gradual rise based on business fundamentals. We have to live with these steep corrections typical of bull market stocks.
Disclosure: invested in both the stocks and Shankara is 26% of portfolio ( stock is more than double my purchase price)


(Amit) #55

When we do not know why it went up then we also should have stomach if it corrects from the speculative peak. As long term holding, I believe in mgmt execution, capital efficiency, operating leverage and future pent up demand. If Shankara does not deliver on those counts then it is a Sell. For now, best to hold and let speculator play the volatilty. I am happy to see this correction as the constant rise in recent days was making me nervous.


(phreak) #56

Lets assume two people started with zero rupees and made their way to a Crore in 5 years. One went there at a steady pace, with every day, every week, every month and every year his corpus growing positively, while the other had 2 Crores at the end of first year, 5 Crores at the end of second year, 2.5 Crores at the end of third year, 10 Crores at the end of 4th year and 1 Crore at the end of 5th year just like the other person. One of them is going to be very unhappy while the other quite happy although they both started and ended with the exact same amount. We are more affected by change than by absolutes.


(Kumar Saurabh) #57

@phreakv6 Your post reminded me of one of my blog posts :slight_smile: . Will try to put it in a VP thread to leverage thoughts of knowledgable investors here


(kanvgarg123) #58

Only if the other neighbour doesn’t tell the first one that his money became double in 1 year and 5X in 2 years. :slight_smile:


(kanvgarg123) #59

amazing clarity of thought and conviction :slight_smile: . I exited at 2260 and will wait if I get a chance to buy at 1500 odd levels in next few months.


(madhavikkutti) #60