In the last week, I have taken a 6% position in Dollar Industries.
I had a discussion with a former employee at Rupa, and my goal was to better understand the innerwear cycle, where we are right now, and a channel check of the current demand. In this conversation, he spoke about Dollar Industries unprompted, and proceeded to explain in the next hour why Dollar has the most differentiated model within the economy innerwear segment.
Prior to this call, I was of the opinion that the chaddi companies were all the same, there was not much differentiating them, and the play is largely mean reversion in the cycle. I now am of the opinion that we’ve stumbled upon a story whose gravity is only visible through scuttlebutt.
I think Dollar therefore is a perfect candidate for a long term position in my portfolio, with the one risk of being a year or two early to the story. It fits my bill of being in an out of favour sector, and the thesis is not very transparent unless one is looking closely. Indeed without this coming from a competitor’s mouth, I may not have paid as close attention.
I have shared my thesis of Dollar Industries on the company thread below.