Any information on credit ratings of manpasand beverages ltd and manpasand beverages pvt ltd ?
Another note on ManPasand
https://advisor.moneylife.in/blog/stocks/article/manpasand-beverages-why-is-the-asset-to-turnover-ratio-so-low/2108.html
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I have a few questions regarding this company. If some of you are following diligently, could you please answer following
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This is an FMCG play. Agreed. But is this really a branded play? IMHO no. Nobody knows their brand and even if they are able to sell in some of the segments, it is because other brands are either not available in those segments or not giving enough trade discounts. I believe such retailers are very fickle minded and the company might lose business any moment another player increases their trade discount.
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This is because I find it hard to believe that there are places where Frooti is not available but their brand is available. Last I heard Parle G biscuit had one of the deepest presence in rural segment â with the highest no. of counters in the entire country.
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What sort of advantage is small pack size. This would be so lame in the name of competitive advantage. All key brands already have a 200ml pack and nothing stops them from having a 100ml pack if the economics permit. Honestly speaking, I havenât seen too many 100ml packs selling in the market â not even in rural segments. 100ml to quench thirst is just not enough. Its like a tea cup.
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I have a very clear understanding that why they might have a high share in railway. In railway, the catering contracts are sold per train for one entire year. The contractor pays Railway lump sum once a year and then its up to the contractor what brand they sell. Because this great company of ours give highest margin, they are naturally the first choice of these contractors since the contractors are faceless and they have no stake in customer satisfaction. They donât even know if they will get the contract for the same train next year. But honestly, how long term is this competitive advantage. What if Suresh Prabhu makes it mandatory to have multiple brands on the menu for these contractors to increase customer satisfaction. 20% of their sales will go for a toss in a single day.
Everything else aside, I have serious doubts about few of the points raised in the above blog s
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How can their asset turnover by just 2X. Thats just too low for a FMCG company. I had done quite a few strategy consulting projects with FMCG majors while I was working with BCG. I know how incredibly difficult it is to create a brand in FMCG space and at the same time how easy it is to have high sales for you until a bigger discounter comes and takes away your pie of the business. I hope that many experienced folks on this forum would agree with this.
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I can also tell you that their brand didnât even in figure in the competition list till a while ago. People would just Say Slice X%, Mazza Y%, Frooti Z% and rest. Given that company has limited product portfolio, I wouldnât bet on these levels.
Comments and answers invited from senior folks.
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Because sell of cold beverages is lower during winters.
Ok. How does that explain lower revenues in Sept quarter? If the companyâs products are predominantly sold in northern India then September sales should be higher because north India is hotter/warmer from July to September. Also January & February are quite colder than July/Aug/September. How does that explain higher revenues in the March quarter?
Because there is a lag in channel sales and retail sales I guess. Wouldnât know more
@rinkupranjan Would you be able to answer this?
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MANB-20161213-MOSL-CU-PG014.pdf (1.4 MB)
MOSL has come up with a company update yesterday.
With due respect to MOSL it sounds little weird why they have gone overboard in defending the company under review. Somehow doesnât feel like an independent research. After reading the report it felt as if Manpasand was defending itself against the original report that had raised the questions.
I am yet to see their products in Mumbai, Navi Mumbai, Pune and any of the rural places in Maharashtra.
After seeing the advertisement in Economic Times in Mumbai I was wondering what is the target segment of this company. Which fruit drink company targeting rural customers with small packaging will spend premium money for advertising one full page ad on last page of Economic Times. May be they are targeting investors more than the real customers with that spend.
Disclosure: MOTOS customer. Respect them otherwise. Exited from the company.
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This report has a one sided view of things. Very bullish, it does not even mention a single downside risk to the share price. I am not saying that it is wrong, just that it does not provide a balanced point of view. Motilal Oswal is also the largest MF shareholder in Manpasand Beverages. Coming out with a very bullish buy rating on their portfolio company does not seem professionally or ethically right to me.
Are there no SEBI rules/guidelines against this?
Disclosure: Hold a small tracking position. Less than 1% of my portfolio.
Lower salaries to the officials bug me. Never seen that happening for a company posing such humongous growth.
Thanks
Kanv
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Reminds me of the case when Hawkins was similarly being very bullishly projected as a buy inspite of all its misgivings and lack of growth at that time 
Slightly off topic. Recently I was in a small town. There was a small soft drinks store. A customer asked for a bottle of Sprite. The shopkeeper tried pushing a local brand. ( not manpasand). He said thers hardly difference in quality etc. But the customer insisted on sprite and finally bought sprite only. (He didnt look like an educated/well informed customer. still he wanted to buy sprite ))
Discl: Have zero interest in manpasand
If you are in Mumbai, try Big Basket for delivery. I have tried their one product Mango Sip. I found it ok but my kid loved it. Canât make up my mind that the product is the differentiated.
I have been an investor in Manpasand and hence my views could be biased.
Firstly, you completely ignore the size of opportunity.
Indiaâs beverage consumption ranks amongst the lowest in the world and in comparison to China, beverage consumption is at what it was in 1994 and even for Coca Colaâs sales in was at 12 units vs 92 units (global average) now if you account for the climatic variation, global warming, rising per capita etc. India has miles to go.
Now sitting in your air conditioned office, you cannot fathom the desperation to consume fluid when you travel in summers heat when temperatures touch 45-48 degrees. Iâve firsthand witnessed the compulsion and by the way did see Mango Sip on my road trip on a State bus from Sikar to Jaipur in Rajasthan.
Now based on 100 calls to retailers you question how can report so much topline! I would call yours as a curious case of floppy research! Manpansand sells through more than 2lac outlets and btw its a heavily seasonal product. And are you questioning the auditors or excise department or what? Be specific and say that the auditor is a fraud and file a police complaint! Why are you beating around the bush?
Now tell me why would Manpasand care what Parle reports?
Also, please realise this a asset heavy business, you need to buy land, set up plant and machinery etc., you need hard cash. Its first IPO was to repay debt and set up the Ambala plant. The Ambala plant has just started operations and hasânt even completed a quarter of sales and you are jumping to conclusions!
Now, it raised another Rs500cr through qip. So that money would take 12-18 to be deployed. What are you upset about? That they were able to convince long term investors such as Fidelity, SBI etc to raise equity to expand their brand and reach deeper corners of India? Looks like you are more upset about the taste or that you missed investing in the IPO!
Why do you think markets are so efficient that they lap up every salaried person who is available at a less than percieved salaries. So according to you people are like tradable commodities ready to swapped at the next available buyer!
Do me a favour get out in the market, take the train or a bus for a change and visit tier 2 towns in the summer season, it will open your eyes!
Finally, I would end with a quote from Warren Buffet-
âSuccessful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You canât produce a baby in one month by getting nine women pregnant"
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Your thoughts on the market opportunity and size are fair and reasonable. However I also think that the questions raised by members on this group are quite fair, given the amount of information available in the public domain.
Low salaries - People do value things other than money like work life balance, job satisfaction, future growth prospects etc. But if you are suggesting that people would work for 1/2, 1/3 rd or 1/5 th of the market salaries then you need a reality check. Get out in the real world and ask 10 people and you will get the answer. And people do have the right to question this.
Advertising in ET: If your target base is tier 2/3 cities and small towns then why advertise in ET? Fair question. Investors have the right to question inefficient use of funds.
Low asset turnover: Instead of berating members, would you care to explain this?
Again you are not being fair to other members. Just because some institutional investors have made investments in a company, that directly does not make it investment worthy.
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On asset turnover, one needs to compare it with a bottler not with a full fledged FMCG player. Many FMCG players outsource partly or fully while here they own everything.
Just because one has invested in a company shouldnât mean that one is not open to reason logical arguments in a logical manner. I have invested in Manpasand in IPO and have exited now with decent gains and would not mind investing again at a later point in time if more clarity emerges about the sustainability of the business model.
Having burnt my fingers in many small and medium stocks over a period of time, my experience tells me never to fall in love for a stock so much that I start to defend it more than the promoters themselves. It always pays off to keep an open mind.
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I went to a SPAR hypermarket in Gurgaon yesterday. Could not find Manpasand beverages anywhere in the mega store. I thought maybe they had run out of stock. So I asked some store employees if Manpasand branded beverages like Mango Sip and Fruits Up were available. They had never heard about them.
This is highly discomforting. Agreed, companies tend to exaggerate in their press releases. I at least hoped I would see Manpasand beverges on the shelves. I was shocked when none of the store employees had heard about them.
Where can I buy these beverages in Delhi or Gurgaon?
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