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One stock which you had mentioned: Cartrade Tech. Where do you stand regarding it?

I have been looking into it lately, and things are found compelling are:

  • its revenues come from PaaS, its an asset light model
  • market leader in online car sales, be it by auction, P2P, B2C, 2W, 4W
  • Has a strong cash pile. What remains to be seen is whether the management is good at allocation.
  • Its Unique Visitor growth is 47% YoY

This bodes well. I find it v.v.difficult to decide the buying range. Hence, I am forced to go by chart patterns alone, trust the market. It has consolidated for past 7 months, right through the rate hikes. That also indicates that the froth, post IPO, has settled.

However, it will be a while before the stock price starts going up. I feel it might be a good idea, to wait for a 52W high to break for entry, and tide out the time correction.

What is your stand on CarTrade Tech?

Q2: Nykaa

There is hue and cry aroud Nykaa being 1600 PE. Well, even HuL would be 1600 PE if it spent most of its earnings on future growth: brand acquisition, advertisement, kiosks, stores, personell etc. But, it doesnt do it, cuz it does not have a wide uncaptured market share and competition at heels.

Nykaa is debt free, profitable (by a whisker), has leadership position, and a good ethical management, a disruptor and here to stay. This makes it an ideal candidate for me to invest.

Just that, valuation needs to be put to perspective.

Pls throw some light on this as well.

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Hello Amit,

I see you are constantly in a flux regarding valuations of various companies. There are many ways to tackle this - simple is to just stay away from over valued companies. But, it’s not so simple actually.

I think you are regularly evaluating & learning. All the best.

You will not get straight forward answer from me, sorry for that. But if you can understand these, you will be a better investor in due course.

I will digress & write my thoughts first & then offer my opinion.

As I often write, there are infinite ways to make money in stock market, below is one of many from investor’s point of view. A trader’s point of view will be completely different.

I’m invested in highly over valued companies like Dmart, Page, Nykaa, Kotak, Delhivery, PB Fintech. I have not touched these companies to trade in & out from a long time. - as a policy (result of market lessons), I’m sticking with them.

  1. I’m not in a hurry to get over sized returns in short period of time.

  2. I believe in the vision of the managements running these companies (CEO of Delhivery is from my alma mater as well, not that this matters much - I’m just bragging) & the opportunity size these companies are running after is mammoth.

  3. I will let time, patience & execution be the judge. I will only monitor.

  4. From my experience, it is better to buy high quality companies and wait for 1-1.5 years of time correction if bought at expensive valuations and then let the compounding work.

  5. Most people in the search of alpha will trade unnecessarily & will have returns far lesser than what holding a Page over a 5 years would have given.

  6. See the stark difference in the behaviour between Lux & Page. When valuations are being sliced through, Page has actually re-rated through the last year. Of course, if some one keeps buying at absolute top every time, then it’s his/ her issue. Any one can show bump in revenue by relaxing the trade receivable days, worsening working capital & cash flows. But this is not sustainable as 1 down cycle will wipe you out. Running a business is immensely difficult. That’s why some companies get 25 PE while others get 60 PE.

BUT, if some one is just starting out with small capital, I would INSTEAD suggest learning technical analysis or learn the art of evaluating small cap multibagger skills from super seniors like @hitesh2710. For example, a trader in Lux would get better returns than an investor in Page if technical analysis is properly executed.

Example: It DOES NOT make sense to invest 10,000 INR in DMart or Page and hold for 15 years. For compounding to work wonders, the initial capital or the capital at work must be large enough. That’s why the strategy to be followed must vary according to the individual’s circumstances.

PRICE - Most people irrespective of how they call themselves is a slave to the short term stock price movement. So, it’s better not to JUDGE people of other investing styles. Our communication must at all times be with Mr. Market. Take lessons and move on. Long threads on twitter, analysis paralysis will take a U turn if a stock falls 15% in a day. It applies for me or for any one.

CAGR is what matters, rest everything is academic & excitement.

If the business model is strong the returns will eventually follow but with a “lag” depending on the level of over valuation.

Nykaa: I’m comfortable with 8 times EV/Sales FY24E. If some one can identify a stock at 15 PE with attributes to reach 45 PE then such a stock will give much better returns than Nykaa. No questions asked. But this is not something I’m good at nor want to do. In the current environment, there might be many such companies actually hidden.

I also look at valuation at this way, most of the times - Will Nykaa or a company X exist by FY2026? If yes, what are the sales or earnings likely to be? What valuation would you give 2-3 years down the line if a company is growing at 30% and is profitable? At that valuation, how much are my returns? Are these returns OK for the risk I’m taking today? Personally, 2x in 3-4 years is what I’m happy with.*

For example, I expect Dmart to report 80 EPS in FY2026. In September 2024, I’m happy with giving 80 times 2026 based on its average historic valuations. I would get roughly 40%-50% in 2 years & I’m elated with this. If there is a material risk to these earnings or to the mortality of the company, I will re-evaluate & sell or stay put.

At this point there are so many other companies that WILL give much better returns than DMart, but I will not waver as my monitoring time & risk is much higher.

Car Trade: I have exited long back & not actively tracking & I’m not sure if the management can withstand competition from Cars24 backed by Tata etc. A used car is a commodity. Same car if placed on multiple platforms, a user will buy from some one who is offering for less. Cars24 might have a lot of money to burn. If Car Trade withstand and be different can then the stock could offer superior returns. At this price, the stock is roughly 5 times EV/Sales? Probably, fairly valued? Not sure.

Disclosure: Stocks mentioned are not recommendations & I’m not SEBI registered. I have a position in the stocks mentioned. The earning estimates are mine are obviously are prone to error/ changes.


For Nykaa, all the birds are in the bush and everyone has to keep guessing about their quantity and timing. For the near term (3~5 Yrs), PE is and will remain ill-suited for for Nykaa’s valuation. Being a growth business, the focus shall be on topline’s growth, which generates enough cash to support all the initiatives. With time, embedded levers shall expand OPM towards 16~20%.

Any thoughts on the customer stickiness (repeat purchase behavior) aspect for the ‘Fashion’ vertical?

Factors such as Family/friend feedback at the store, impulse buying, touch, and feel play a major role while buying fashion products. Virtual tryouts cannot overcome these factors. The online marketplace will always remain on the back foot on these aspects.


Hi Surender

With regards to Fashion -

Both Amazon & Myntra being the first movers played volume game & so are prominent in value segment. Nykaa I believe had time to understand their business models and is consciously choosing to attract higher segment population, relatively. The price elasticity, demand is far more secular & also better unit economics to cater to this segment. This segment is also more sticky & do not switch apps in search of coupons & small discounts.

Also, Fashion app is curated & carries latest collection within a brand (say Biba) than a Myntra.

That’s why the AOV of Nykaa is double (I think) of the other 2 apps.

Rural - Rural also contributes sizable portion of revenues and for them online is better option than to travel to near by city to buy.

Having said this, going out & checking before buying segment will remain dominant and company is aware of this and was always conveying that they will also open EBOs etc. Offline retail is a must.

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Just one question regarding Nykaa and higher segment. Do you expect there is enough juice in the TAM for higher segment or do you expect Nykaa target lower segment in search of growth ?

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TAM is a moving target and can double in 10 years. Whether the company can gain market share and grow efficiently is something we should bother about. Even a little market share gain over a decade can add up.

We are a growing economy with aspiring people, so people will upgrade as & when they move up the social ladder. Companies just need to stick to proper business model and do no hara kiri.

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@richdreamz @jamit05 - In context of your liking of Nykaa business as a niche retailer in Beauty/Fashion and Page in undergarments/sports wear, what are your thoughts on Footwear, specially 2 new entrants - Metro Brands (from top, business model looks more inclined towards like a Page as licence owner of Marquee brands, although they have inhouse brands as well) and Campus Activewear - Well established fast growing Indian Sport’s shoes company with good back end integration & distribution/retail presence.

Lastly, Vedant Fashion - again a niche dominant Ethnic/Wedding player.

Would be nice to know both of your thoughts on these three in terms of their business model, risks in model, strengths/weaknesses and valuations. It would give a perspective on how to look at such niche retailers.

Disc: Invested in Nykaa.

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Hi -

I have looked at all of them but I did not want any more retail/ apparel exposure in my portfolio, so did not seriously consider. The below are my cursory thoughts.

  1. Why invest in Vedant (V) or Campus (C) at 70 times forward PE when Page (P) is available at 60 times? Metro (M), I believe is at 60 times. In my opinion these three are no where near Page’s quality. It’s very important to know if a company deserves such high valuations. It may as well, but there is no track record yet.
  2. I think there is a lot of narrative in Campus, I do not see any moat - opening trade narrative is active here I believe, just like hotels etc. There are dime a dozen in active footwear. It’s only a matter of time before the moat is eroded & valuations do not offer any scope of further re-rating.
  3. I prefer Trent (T) or Relaxo (once growth of 20% restores in Relaxo (R)) than the above three, any time - both are very expensive too. Anyway, I did not want to further invest in retail as Nykaa (N) & Page are already there.
  4. Vedant story is good but any retail company linked to fashion/ trends/ niche will get disrupted one day while a banian/ inner wear is a staple. Too niche. People probably won’t wear Manyavar jeans or Manyavar T shirt. There’s already a lot of competition there, so even in future, chances of Manyavar expanding to such categories & finding success is less.

Disclosure: Not invested in C,V, M, T, R but in N, P.


Hi - Interesting business model. Thanks for sharing your thoughts. What’s the anticipated horizon for steady state margins?

IMO, expenses shall grow only at a high-single-digit % for the next 5 years as FY22 P&L is heavily loaded with them. However, revenue can do 30%+ YOY in this period.

Disc- Actively interested.

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By this fiscal end both Policybazaar & Paisabazaar would be profitable (ex-esop costs). From there, I believe in 3 years it should reach steady state margins of 35-40%. (my assumption).

My assumption is also that the revenue would grow as you indicated. This is very high operating leverage business. I have some numbers in my mind but market doesn’t want to give much rope. First show me the money is the approach market may be taking - sensible given the circumstances. Patience is the approach I want to take here. Let’s see.


Nykaa and PB Fintech have hidden operating profits, by adjusting for discretionary expenses such as A&P, ESOP, and new initiatives. On top of that, they are B2C and asset-light.

Management can keep their focus on initiatives to scale future revenue (@30%+ CAGR) since cash from operations and cash on the book can easily cover discretionary expenses for the next 2~3 years. IMO, these traits are important for someone to show patience while owning these businesses. However, Delhivery seems weak on the above parameters.

Request your perspective.

Hi Surender

This is a bit of macro, hope & leap of faith call. Allocation here is actually higher than PB.

Probably Logistics is one of the mega industries where Indian companies market cap is small compared to China or USA etc. Banking, Consumer, Insurance, Retail - all have mega caps.

My opinion is Delhivery has set cat among the pigeons in logistics with its technological & operational excellence while growing at massive rates. At these growth rates, many operating parameters will look hazy. We will have to give time & believe in management capability. Monitor them closely & if there’s any major disconnect or integrity issues, jump the ship. At the same time, we should be more skeptical!

Logistics is very complex business & operationally challenging. I think any large country will not have more than 3 pan country logistics companies as most will remain local or perish. US has Fedex/ UPS, China has 5 - ZTO express (Delhivery is trying what ZTO did).

India’s logistics still inefficient. Delhivery is customer oriented - runs low cost efficient business & efficiency gains are passed on to customers. Who doesn’t want to reduce logistics cost? Low working capital requirements.

Delhivery also is most diversified logistics company - most E-commerce, PTL, b2b, c2c, d2c. How well can they integrate all or part of these to reduce “dead space” & so reduce cost has ro be seen. Looks ambitious. Let’s monitor. This is also a play on e-commerce growth in India despite Amazon building captive logistics company.

A standalone logistics company will always be more efficient (revenue center) vs. for a captive logistics (cost center). Another example, Infosys will deliver project at a lesser cost & be time efficient than what a captive American bank’s IT team can do. So, the logic of Amazon having its own logistics may not hold tight. Yes, it may reduce growth rates but Delhivery could stand out.

Valuations are palatable relative to Nykaa (Nykaa vs. industry & Delhivery vs. industry) but is expensive otherwise. Some people are comparing cross industry valuations - I personally think we should not compare EV/sales of Nykaa to that of PB Fintech or Delhivery as the steady margins for these businesses are very very different.

This is a nice interview of Sahil:

Disclosure: Holding with leap of faith on management’s execution & patience required 3-5 years.


Hi- Thanks for sharing.

Sahil stands out - clear thinking, easy to hear, and imparts knowledge without giving cognitive load. The intent of the management to be the lowest-cost and multi-service player stands out. Considering the huge opportunity size, management’s focus on high growth seems the right approach when money is not a constraint.

The underscored profitability metric (adjusted EBITDA) seems lousy due to the consideration of ‘Actual lease rent paid’ to bring this number in black. Why such a rush, I wonder? EBITDA is accrual based since both revenue and expenses are accrual-based. And, adjusted EBITDA should be derived using the same principle. May be an invisible pixel in the bigger picture.

Henceforth, I will track actively.

Thanks once again for your generous responses.

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There’s lot of difference between Damani sir & the young listed unicorn founders. They will learn in due course what actually matters for premium valuations. Market will see through such silly things in long term. For us there shouldn’t be any big red flags like tax evasion, money siphoning etc.


Amazon’s logistics can’t be written off as “captive logistics”. They are really good at solving a problem for themselves, and then offering that solution to others. Look at how AWS came about. They can (and most likely will) do with logistics what they did with AWS. Already, fulfilled by Amazon does a lot of logistics for merchants on the Amazon platform. It’s just one more leap to offer logistics to everyone - even those not on the Amazon platform.


You have answered one question I had…
Who is Delhivery’s competition… It’s the established ecom guys. But that is not a problem right away, the market is big and untapped.

About, last mile delivery, I think those capabilities are best handled by local guys with EVs, like Zypp electric. But, mid mile and b2b is still open. However, there are plenty of incumbent players, with years of experience and efficiency. Competition from unorganised players.

I don’t buy Sahils talk about being a unique payment gateway. There isn’t anything about it. Fairly, simple, every player is doing it, big or small.

What I dislike is, this business doesn’t have pricing power. Price has to be lowered to increase vol, even at this early stage.

For now, I am gonna pass on this one.


I have followed your slightly different approach to invest in platform/new age companies, a lot of which are recent IPOs. Nykaa, Policy bazar, Zomato, Delhivery, A lot of them listed with a lot of fanfare and in the subsequent sell off were hit hard. With the kind of charts I saw, which you put up as falling wedges, what I see are charts with consistent lower tops and lower bottoms in a lot of cases, or basically weak structures in most of them. Going ahead, I think there are going to be a lot of investors stuck at each of the higher levels which should offer resistances at each level once the stock manages to move up.

Instead of these, focussing on companies like Page, United Spirits, (good to see the former two in your list) even good FMCG companies like say Hind Unilever, Colgate, (not to compromise on quality of business and longevity of the runway) which are close to all time highs, or atleast on chart structures seem very robust (besides being proven race horses) might be more rewarding.

Stocks languishing at or near all time lows, or close to lows, or are not participating in any meaningful rallies seem to be there for a reason. I think most of these IPOs had already come at very lofty valuations, looking at the market mood (at the time when it was party time for all new fancy IPOs) and then fancy stories were floated around to make these appear stellar businesses to suck in retail investors who bought in with a lot of gusto even at much higher levels.

While we may be smart enough to be able to buy once all the froth is out of these, and downsides might be limited, what about the upsides?

Usually stock markets are always on the lookout for new stories /new themes/new narratives and my fear is that all the narrative related to these Nykaas/Policy bazaars/ Delhiverys are out in the open, and nothing new is going to come out… The only trigger left is a real big positive surprise in earnings which makes the stock prices run hard, past all major resistances.

A small note on these falling wedge theory… Usually falling wedges are to be looked at in bull rallies when these smaller falling wedges signify short term counter trend consolidations, before the major trend resumes.

The simpler aspect for anyone who follows basics of technicals is to look out at stocks which have broken past major resistances, and are consolidating while respecting major support levels. All the better if its above all time highs or near all time highs. The pathway of least resistance in these kind of situations is usually up and returns are quick and plenty.

There can be an endless discussion on the merits of businesses but we make money as investors only if price moves agree with us. And all the while we remain invested in these under performing stocks, a lot of other stocks keep running hard. Opportunity costs is something to be considered.

Personally I always want to see my money work hard for me, and not sit around lazing in stocks which don’t move much. Just my view. (Probably I don’t have the patience you seem to have nurturing these businesses in the portfolio, even when their stock prices are stuck :grinning: or maybe by nature I am fond of fast cars. :grinning:)


@hitesh2710 Sir,

Got up in the middle of the night for water and saw an email notification of your post & I had to read it & my sleep is gone!

You are not only fond of Ferrari, you will switch from a Bugatti to a Ferrari @ 200 mph if the Bugatti is found out to be Maruti in disguise :slight_smile:.

Actually, I have considered if these (Nykaa/ PB/ Delhivery) will turnout to be a Naukri type (7 years of consolidation from 2006 - 2013 breakout) and if so, these have only completed 1 year listing & so I will have to incur humongous opportunity cost if at all.

As you said, the price action should give me that clue first hand. While they have already have given that clue because they are at lows while market rallied. So, the price action for the next 2 quarterly results will confirm whether it’s a Naukri or a Page or a dud. I still believe market wants to see consistency in few quarterly results before rewarding them.

6 more months of price action to satisfy the bug of conviction & patience in these 3 stocks and I will take a decisive action to hold or trim allocation. I will be objective sir & will report lessons & learnings post this.

For now, only half my PF is running/ walking with Dmart, Page, Triveni Turbine (please have a look at this stock).

Now, back to sleep :last_quarter_moon_with_face:


I’m heart broken to report changes in my technical & fundamental picks as reported by me on Aug 7th post.

Heart broken because I expected them to be in PF long term & I have researched a lot. How ever, hours spent on a stock doesn’t mean anything unless so many things fall into place.

Also, my general observation on my personal performance is - Trading gave better returns. Probably because of my mental block & resistance to change to the market structure past 1 year. Having a vision & patience is so so important.

Being emotional is detrimental to returns - so, I have to respect stop losses & technicals.

Posts by @hitesh2710 sir to me in March 2022 & October 2022 have been learning experience & serendipitous.

Full Exits:
PB Fintech: -10%. Fresh breakdown, ominous chart.
Indiamart: +10% (already reported).
Zomato: +20%. (already reported).

Delhivery by half: +10% still up on cost basis, Dmart by half +20%, Page by a third +25%, Kotak trimmed by a fifth +3%.

Stay Put:
Nykaa (-15%): Here my attitude remains, bring it on Mr. Market.

New entries (as reported in technical thread):
Triveni Turbine
CMS Info
Mahindra CIE
Federal Bank
Anand Rathi


Just an observation…thats because of the way market has behaved in last 1 year…gone nowhere and with so much variables playing uncertainty…a good trader has much more chance of better returns as compared to a good investor…

but its good if you have discovered a better part of your skills…sustainability is the key…