Key factor here is domestic vol growth. Standalone sales domestic 3 year cagr for 1QFY23 was 9%. Price hikes were negligible, so largely vol growth. After very muted domestic sales in past 2 years, I would have wanted a better no, maybe 15%+ for this to be worthwhile at the multiples it trades at. The assumption that gaining mx from unorganized is not panning out so far.
4QFY22: “GST has not led to a major shift from the unorganized to the organized sector in our industry. So – and neither has the pandemic sort of had a major impact on that. What we have – remains to be seen is what does the commodity price increases and how do the commodity price increases impact the local cooler industry or the unorganized sector industry.”
Since it’s again corrected to near ~900ish, there can be upsides over the short to medium term, nevertheless given the implied growth looking at multiples vs reported growth, there are better alternatives to invest.
I think I would still wait to see what it reports fully in FY23, in the season ahead, a clear year ex volatility. Channel inventory has cleaned out, and perhaps finally FY23 can be a strong year. If nos remain subpar, would exit.
Need to take these comments made by the founder with a pinch of salt.
1QFY23: “FY23 trade partners have come back and are very excited, wouldn’t get into specifics, you mentioned 30%, 40%, we wouldn’t there get into specifics, we expect that we will end the year – we should sort of revert back to our historical sort of growth trends. the channel inventory seems to be reaching the regular pre-COVID normal level, the coming couple of quarters would be in line with our historical growth patterns, the July collections are also pointing in the same direction.”
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