@Aditya942000 very good finding really interesting …
Sure sir I will rethink about my investment rationale. And this company says POD means provides book production… That’s same as print on demand concept or anything else??
Need your thoughts
One more thing about Repro is that they claim to sell books which are not available with any other sellers i.e. mid titles.
But upon random searches on Amazon.in every book that repro sells is also available with other sellers at same price n also the buy box was allotted to other sellers majority of times even for delivery near their Bhiwandi plant.
Though they will be able to increase their topline with upcoming capacities but what about margins, as they cannot keep prices higher than other sellers.
Also mgt commentary has also changed, in Q2 concall they were focussed on increasing topline only in order to capture market share. But in Q4 concall while justifying their lower sales in BOD they gave excuse that they now want to focus on bottomline.
Disclosure: Not invested.
To understand repros position we need to elaborate their front mid and back end titles story…
Basic diffrence in indian and other developed market is our entire book market is not as diverse as others are!!
So there is no significant demand for back and mid titles which ingram had thats why POD sales from ingram titles is limited to 15% which is bigest red flag…
And if there is any big market for ingrams titles than why it will tie up with repro.One full flaged POD unit with 20000bpd capacity cost 25cr so 4 units needed to cover whole india 100cr is what for Ingram?
They have 4 5 companies to do so in US UK AUSTRALIA and CANADA.
They r not taking indian market serioualy because they know abt demand…
Disc:-Sold 50% after Q3 nos and remaning on Q4 results …
I agree with all your points and now the company margins are not great.
But one needs to wait for one more year to find out how the new facilities in Delhi and Bangalore will add to the financials.
Repro is not a short term story at all.
Thinking of long term, when the cost of renting a place for book depot to sell a book will increases in future, manpower to pay increases, then the small book stores will close.
And people will start to buy it online.
As for me, the managenemt is honest, but i can see that clearly lack specific direction, as thet said they will get into K12 books also !
I would like to stay because of a good management and good thoery of more books will come to online.
If you are looking for quick gains stock prices, then repro is not that kind of a stock.
This may be a good share to be accumulated when it starts trading at 5 to 7 PE and to be offloaded when the market is gung-ho about small caps. The management over promises and under delivers. Anyway they are good at painting rosy pictures about the company and the many disruptions they are going to cause with their futuristic BOD, Rapples etc. But it seems these efforts have not added much to bottom line.
Well your conviction on the stock might have changed, but the ceo still holds 1.32% equity and is not selling. Might be because he seems bright future in the co.
Also some one has said that in a journey of multi bagger there are years of stagnation and consolidation and in the same period fundamentals backfilling.
I would look for cost efficiency, long contracts, pricing power, promoter willingness to run business. Rest is rest.
Hi Jose,
Would appreciate objective reasonings on the same . Buying and offloading are too subjective and offer little value on this thread. Thanks
5% import duty on books will directly benefit Repro since it competes with publishers and suppliers who import and stock. Hopefully, they would utilise Ingram relationship more effectively now.
Ingrams 8milion titles generates 3000 books per day sales when book imports stands at Rs.400cr which translates verybig number on per day basis.
So according to me those titles are irrelevant and will not have any significant impact on numbers so be causious and wait till atleast few numbers get delivered and sustain for 2 3 quarters.
They have fooled public (specially vijay kedia and malabar) twice.
So wait till numbers get delivered…
Disc.:- Sold at 600
Rising import duty on import books is going to be trend from now onwards because that will benefit Indian book industry so that will surely benefit to Repro over longer term once online book market become mature in India and being first to implement this Repro will benefit the most…
Mr. Kedia recommended the stock after Q4 results so I hope they know the risks. On its part the company had been saying that they are after volume and market share and not margins which would take 12 months at least. Now they are saying they would go after margins which is a change in strategy as they have gained scale as a vendor in Amazon ecosystem. In fact my calc suggests there is good margin improvement in the online part of biz qoq due to prioritizing of bod sales vs. stock sales. I am satisfied as of now since biz parameters are on the way up. This is seen in the rating upgrade and some signalling by the promoter in lifting some shares from the market. I plan to give another 2 quarters as I am not in big notional loss as such on 4% holding in my PF.
What is the source of this information?
Washington university has sold almost of its holding…
I am vendor on amazon so my experince with amazon says it will never allow anybody to gain any margins.
And stock sales is a clearcut misleading story why they r not disclosing margins…
Have u searched how many sellers r there on amazon in books category?
No idea about Washington Univ. but Mr Kedia seems to be fine with it. They are not disclosing margins but nothing stops us from doing some back calc for subsidiary’s EBITDA margins and the management commentary is consistent with it.
Few points :
Specific to online book business - 2 years back from 0 turnover to few quarters forward , company making losses, to few quarters forward , company making ebitda level breakeven to few quarts forward company making almost PBT level break even n 150 cr topline run rate. That has been story so far. It’s an execution story where things will not be drawn on a static board n will move . So, one must keep valuation n execution risks side by side and keep analyzing by connecting all the dots .
Also, have highlighted earlier if it’s such a great business then, why Amazon n Ingram not taking stake. Reality mostly lies in between extremes but human behavior make us think in extremes .
Regarding Washington, Washington made same day buy n sales twice in last 6 months. Also, they sold in another education company. Now , I do not know how to tag it to this specific event . Manytimes, we estabilish things as causality n there are N reasons why they could do this. Anyway, investment is a personal research process n the less we rely reading what others are doing the better
I think we must take the talk of market size opportunity n the asset light jazz with pinch of salt . Consultants , mgmt gives oppportunity size but we must find our margin of safety . The way I see it , old business generates 30 cr cash profit without getting into any risk after ensuring they get limited clients with letter of credit n all . With 0 growth , this business can fetch 10-15x valuation which comes on tge average arpumd 400 cr. Remaining is the money we are paying for online book business. Leave it one to decide how much one wants to pay for it .
On managements, these are qualitative aspect and one may have different view from other n the view also may change but j would like to form a view based on 5-10 years of history of what he told, what he executed , how he treated minority share holders , how he performed when things went against him rather than one point even where there could be N points of arguments from both sides and only future could reveal which way it would go.
However, @Kuldeepjadeja has a fair point. It would be prudent to ask management why they did not have this break up earlier and why they felt that it is necessary to make this disclosure now. What was their earlier plan on these 2 business streams n does anything changes in terms of their analysis of possible topline n bottomline opportunity n were they right or wrong on any hypothesis ? What is the real addressable profitable market size opportunity for them keeping the big number aside n considering the latest stand ? It prudent to keep eyes and ears open without falling in love with stock n adjust our views with changing facts and analysis, but at the same time ignoring noise n catching right signals n balancing it with prudent margin of safety n portfolio allocation
Exactly, the latest disclosure irked me as well but I tried reading all transcripts for the last 4 qtrs and arrived at the conclusion that they have been disclosing the same in the words but not in exact nos. on the PPT. I tend to give benefit of doubt only because we are watching actual improvement which might be slower than expected. I don’t believe that large equity investors like Mr. Kedia and Malabar Fund won’t be aware of the same at least I won’t assume the same without evidence to the contrary. Their fund infusion is specifically to build out the online segment. We also need to keep in mind that their is no exit for them given the current liquidity situation. If anything the management has advanced the decision day for investors like us by focusing on margins on own BOD sales. Additionally, I struggle to find many mid caps where the biz is on the way up structurally.
Promoter buying happened in last week of June.
1)I am seller on amazon so its easy for me to add book in my selling portfolio and see the real picture.
After being book seller i realised how repro making so many tricks and hiding the truth.
Amazon was chrging 17% commision for books
2)I have also studied so many “product sales statics” for book. Like top10 ranked product accounts 42% of total sales on amazon.
Top100 ranked books contribute 70% of books sold.
3) so now where is the place for Ingram titles?
And thats why i am saying its IRRELEVANT.
4)I have talked with one Ingram content group employee he told me about the policy nd nature of Ingram,and is similar to amazon they will not allow anybody to earn money.
He also raised question about total projected sales figure.
5)Look at the behaviour of the management then and now !!
6)Mr.kedia has to reveal full details why he was reccomending repro after Q4.
Anybody who is still thinking this story will work has to made table and try to project 5 yrs prospective like how much % of qoq growth required to achive any significant number for top nd bottomline.
Disclaimer: I do not own Repro . My views can be biased considering my Employer is a direct competitor of Repro both in Offset printing and POD/BOD.
Repro by no means is trying to better its margin’s in POD, rather they are spoiling the market by keeping their prices abysmally low to gain market share . Margin’s in printing are anyway very limited . The latest price grid shared by Repro in market is even lesser compared to some smaller printers in the POD space.
@amanbindra
Can please elaborate how ur company is competetor of repro in POD space where content is exclusive with ingram.
And throw some more light on whole ecomrce sales of books…
Thanks
