I have been doing some reading on TCNS clothing and posting my observations below. Looking for views from fellow members.
(This is my first time posting a profile for a company so there might be things which I’m not sure whether they really contribute to the assessment of a company or not. Looking for some feedback on that too.)
Financials:
Good RoE, OPM, Sales and Profit Growth
Nil debt
Valuation history:
2011 - Matrix Partners acquires stake, Valuation 375cr (Source: https://www.vccircle.com/ta-associates-bets-140-mn-w-brand-womenswear-maker-matrix-partners-exits)
Aug 2016 - TA associates acquires stake, Valuation 2130cr (Source: https://www.vccircle.com/ta-associates-backed-firm-behind-womenswear-label-w-gets-sebi-nod-for-ipo)
(notable investments by TA Associates - ACT broadband, Billdesk, Lal Path Labs)
July 2018 - IPO, Market Cap 4150cr
Nov 2019 - Market cap 4444cr
Brand & market:
Niche market segment: women’s ethnic wear and fusion wear
Different brands for different quality and price segments:
W: Premium Fusion wear, preferred by working women
Aurelia: Contemporary Ethnic wear; preferred by upper middle class women
Wishful: Premium Occasion wear
Popular among women, one of the must go-to places for ethnic
Reach:
Wide network of stores, present in almost every mall in tier 1 and tier 2 cities
Mix of EBOs and MBOs (lifestyle, shopper’s stop, etc)
Expansion into neighbouring international markets (Mauritius, sri lanka)
Strong online presence:
Available online on every major online shopping platform (myntra, jabong, amazon, flipkart, nykaa)
Decent social media presence
Instagram followers:
Aurelia - 70k
W for Woman - 205k
BIBA - 270k
Global Desi - 324k
Fabindia - 313k
Brand ambassador - Disha Patani, Campaign - That Disha Look
Competition:
Very less competition with similar reach
BIBA, Global Desi, Soch, Pantaloons, Anokhi, AND, Rangmanch
Fabindia - better quality but more expensive and relatively limited kind of range
Almost no chances of having foreign competition even in the future since ethnic wear native to India
Competition from local stores
Management:
Well qualified and well experienced management and directors
MD: Anant Kumar Daga (Previously Director, Sales & Retail with Reebok)
Directors:
Bhaskar Pramanik - (Senior Advisor, Rothschild & Co., previously Chairman, Microsoft India)
Sangeeta Talwar - (previously involved in launching major Nestle products, Tata Global Beverages, Mattel India)
Naresh Patwari - TA Associates
Proactive and non-emotional about closing about stores not doing well or shift to better local locations
Cons:
Low promoter stake
Low dividend payout
IPO’d in 2018, so financials only available for last 4 years
Need to dig further:
Trademark dispute with Wrangler
Concentration of warehouses in Delhi NCR
Interest cost increased in last quarter (Jun 2019)
ESOPs - expenses and equity dilution?
Debatable:
Business and footfall disrupted in airport stores because of jet airways grounding
Company has high investments in liquid funds