La Opala cannot respond to the ramp up in competitive intensity: Saurabh Mukherjea

Discussion in 'Portfolios Of Famous Investors' started by Vidhi Khanna, May 31, 2022.

  1. Vidhi Khanna

    Vidhi Khanna Active Member Staff Member

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    Saurabh Mukherjea, the fund manager of Marcellus PMS Fund, has given a detailed explanation in the ET as to why he chose to remove La Opala from the portfolio of the Little Champs.

    He pointed out that the reason for the exit is because a couple of companies over the last three years have ramp up the competitive intensity pretty aggressively.

    He explained that Ovenware is still a small category and in that category, there are two other companies with plenty of cash generative businesses. The two other companies who are ramping up the competitive intensity are cash generative businesses. Channel checks are showing that the market share of La Opala is being taken by the competitors.

    "We have been left a little concerned about whether La Opala can respond to the ramp up in competitive intensity," Mukherjea stated. He expressed confidence that there is no reason that they cannot. "It is a well run company and Ajit Jhunjhunwala does a wonderful job but we did not quite see the competitive response and hence the exit".

    He clarified that if La Opala steps up and deals with the ramp up in competitive intensity, they will obviously revisit that exit.
     
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