If you’re not on the FREE e-mail list and someone has shared this with you, thank them first and then get on the list alongside 2,411+ smarter folks!
Direct To Consumer
So in 2019, this was the message.
Cut to 2021.
What about Nykaa?
At a PAT of 60 cr., Nykaa had a Market Cap Ask of ~1 Lakh crores.
Mobile and Digital first, online player doing Omni-Channel retail.
How do you ascribe value?
Well, HUL’s big billboard ads show a small callout at the bottom, ‘Buy on Nykaa’.
So what’s the point here?
As the world moves online and first interactions happen through a mobile app, there is an increasing belief that companies need to evolve too.
If they can’t, the market is ruthless to de-rate or re-rate them.
Despite being the largest beauty products player in India, HUL still trades at median PE multiples.
As the Thrasio business model picks up and more and more companies in India are trying to scale up smaller brands, there is an increasing case for companies to either innovate or collaborate for interesting partnerships.
What was even more interesting was this small little announcement done by Dollar Industries.
Dollar had an existing JV with Pepe Jeans.
With Pepe going out, GOAT Brands becomes their new JV Partner, a new-age Thrasio styled venture accelerating smaller brands to grow exponentially.
This make a case for interesting synergies - brands being cross - sold, offline to online and vice - versa and most importantly, focus on staying relevant.
[Premium] Diagnostic Chains
A lot of times, people like looking at numbers and drive conclusions.
Doing this need not necessarily be a good idea. Numbers and narratives should always be read together for us to draw conclusions.
I recently did a webinar which can be accessed here 👇
The Point?
Well, if we just look at ROCE and PAT, there are still other variables attached to it.
It could be a mix of WC Days and other factors affecting your Free Cash Flow.
The next question?
Why is the WC cycle longer for another incumbent?
Maybe we need to then deep dive on the revenue structure.
What we found that Thyrocare does ~67%+ revenue from B2B sources leading to longer WC days, similar ROCE as Metropolis but a way lower PE multiple.
Guess the Breakout Indian Stock of the Week 🚀 [Alpha Swing]
In this week’s 3 swing trades, we are back with the interesting guessing game.
If you can guess the stock right, you get a complimentary 1-month premium access to Alpha Swing.
This is one of the most favourite PSU stocks and recently the Government has also been pushing the peddle to have this divested.
The stock is available at a Forward PE of 7 times earnings.
While Operating Profit margin is at 33%, it is still a long way from the peak of 41%.
While 64% of the Company is owned by President of India, 7.3% is owned by LIC.
Guess The Stock.
Answer to last week’s quiz was Prince Pipes. If you made the guess right, kindly respond - you shall get the 1-month access.
Check out our FREE US Stocks newsletter below read by 4,094+ subscribers 👇
Webinar Updates
Open for the month of December ‘21. Feel free to send in your suggestions :)
StockRoom Sunday
Worried about the 27% drop in PayTM's issue price? Here's our take alongside market views for the week.
Podcast of the Week
Song of the Week
Continuing with The Weeknd vibe, again.
Book of the Week
Money as we know is changing.
While fiat is losing its implications given the way currency printing is taking place globally, we are seeing a tectonic shift in the way we see money.
Are Cryptocurrencies the future or CBDCs will take it all over?
This week’s book is - The Future Of Money.
Click here to check it out.
This little part, this is happiness ⬇️
We saw a peak attendance of ~600+ live attendance and the session was rated 4.7+ by the folks who attended it live.
In case you were not able to attend it, here’s the video.
For more further updates and enriching conversations in the future, click here ⬇️
If you liked reading this, why not make someone else smarter too?
Will see you again next week.
Ciao.