The abovementioned Quote is actually real as far as stock picking and investing is concerned. I remember the day in early 2011, when I went to Bangalore to meet a company (Page Industries) not so famous on the bourses when it was trading around Rs 1700 having a turnover of around Rs 700 crores and PAT of around Rs 90 crores. The factors that impressed about the company were, business segment (inner wear), Legacy of foreign brand for next twenty years, impressive margins (~21%) and return ratio (~40-50%) and road way to growth. It proved to be a multi-bagger from there in 4 years wherein the Net Sales and PAT of the company has increased by ~ 2.5 times and the market cap of the company increased by ~ 10 times. The stock was trading at around 22 x FY12, which is now trading over 60 x FY16. What led to the continued growth in stock price was it consistence growth in topline and bottom line with operating margins being intact. At the same time Page being present in the highly unorganized market with few competitors has left little choice for the investors to choose between. However from last few quarters the growth rate of the company has started to tapper (due to higher base effect) especially at the bottom line level.as the operating margins has started correcting. This is also reflected in the stock price as it seems to be peaking out being very expensive. We have seen in the recent time a company getting listed in the same segment owing the known brand “Lux” which strikes to mind of most. Lux Industries Ltd. got listed last year to NSE and BSE. Lux is one of the leading players in the premium branded innerwear space. With a wide range of more than 5,000 SKUs for men, women and children, manufactured across 11 facilities strategically spread in the country (3 crore units per month i.e 10 lakhs units per day), the company’s brands are available across around 5 lakh outlets, pan-India. Lux Industries’ turnover and net profit has surged at a 12.57% and 43.73% CAGR (compounded annual growth rate) over the past five years, with total income and net profit standing at Rs. 941.16 crore and Rs. 51.34 crore respectively, in 2015-16. The company’s growth story has been characterized by continued focus on premiumization, portfolio expansion in existing product segments, venture into new segments, distribution expansion in existing markets, and also penetration into upcoming growth centers. The company has been focusing on their premium brand ONN to derive better margins. ONN launched almost 4 year ago with Shah Rukh Khan as its brand ambassador is growing at a rate of 30% unlike the rest of the mass market brands such as Lux Cozi and its franchise. The company has been doing a lot of brand building exercise over the years with actor Sunny Deol endorsing Lux Cozi innerwear 15 years ago and now Sushant Singh Rajput and Dev as their new ambassadors for the mass brand. The company, which has forayed into mid to premium women’s wear through its brand Lyra, owned by its sister concern Ebell Fashion, is sensing a good opportunity in this segment. The company has plans to double its turnover in next 4-5 years for which the company has already commission the ambitious new state-of-the-art 6 lakh sq. ft. (approximate) manufacturing facility in Dankuni, West Bengal. This integrated facility has the capacity to produce 5 lakh units of finished products a day (50% of the present capacity) and the technology orientation for this plant is visible with the fact that they have imported German knitting, Italian cutting and Japanese stitching machineries that are being deployed to improve quality of the products and reduce cost. This will help in increasing the margins and compete with peers.” At the same time three small manufacturing units in and around Kolkata with less productivity was merged and shifted concurrently, which help the company to save on rent and also turn the assets into large, useful warehouses. The company has already started planning for Phase-II expansion to be spread over 8-9 acres with a capex of near Rs 60 crores that seeks to double the production capacity of the unit over the next 3-4 years. Lux Industries remained the largest exporter of innerwear in India with total export sales of Rs. 117.31 crore in 2015-16, which contributed to 12.62% of the company’s gross income during the year. The company exports its products to over 65 countries including the whole of Africa, the Middle East, Singapore, Malaysia, Australia, and North America. Besides, it is also focusing in global markets like Europe and Australia while keeping acquisition options open to achieve its target and have roped in cricketer Brett Lee for endorsing their brand there. From being traditionally considered as an essential commodity, the innerwear category is increasingly witnessing a shift from being functional into a fashion category and from a price sensitive into a brand-sensitive category. Together with accelerated growth in market share in the hands of the organized segment of the innerwear industry, a rapid correction in per capita spends is likely to drive the sector’s growth at a 13% CAGR between FY13-23, throwing up huge opportunities. Compare to Page industries, Lux Industries has lower Sales, Operating Margins and Return Ratios. However, the point of catch here (Andar Ki Baat) is that all these three parameters are increasing for the company, wherein for Page Industries things have started to become point of worry as the growth rate, operating margins and Return ratios have started to fall. The most important thing is that Lux industries is trading at almost ~50% of the valuations of Page industries. At the current juncture the Stock has promising growth path, increasing sales, OPM and Return ratios and a better PEG ratio ~ 1.1 compare to Page (~ 3-4). Now it is a matter of time that when it becomes “Public ki choice ka Baat” one has to wait and watch.