True high valuations, staying away from it. They are already under litigation for cello brand for stationery. In their DRHP the company did not even own the Cello Brand and would have to pay 0.5% of sales as royalty which can even be increased to 1%.
I think they have scrapped that now but still very inflated valuations and only OFS.

Hi @Harshit_Marwah
Buying n selling decision should always be your own. Its a personal choice.

• Do you like the valuation it is trading at?
• It has lot of debt, are you ok with this?
• Do you see a clear vision where the company will go in next 5 or more years?
• Its a microcap company, so during bear market phase, it may show huge correction with no fault of its own. Are you ok with that? What’s minimum drawdown you can handle?
• what is your exit criteria?

Many times, since these companies are small, we get to know about them because they cross 1% threshold mandatory for disclosure. Otherwise they may have some other large cap portfolio, which we dont come to know. Sometimes, even promoters may be using clout of these investors to pump up share price of their company by investing promoter’s money in the name of superstar investors. All may not be like that.

Sometimes I wonder on what basis these Superstar investors make buy call. For eg., Vijay Kedia’s investments into Atul Auto, Patel Engineering, Repro, etc. Ashish Kacholia too has few stocks with low ROEs and stagnant financials.

Reflected on your analysis. Considering that fact that a Plate of Dosa and Coffee can cost Rs 350-400 in a Domestic Airport, an annual fee of Rs 1000-1500 for a premium credit card that offers free Food (in Lounges) may still be a viable proposition. And Indians are very good at doing these calculations.

Have also seen that some Lounges have created an extension to acommodate the surge in demand. Despite this, some people are not able to enter the lounge due to huge rush. In Mumbai one Lounge does not allow people to enter earlier than 4 hour of flight takeoff (should improve footfalls). So even if some banks reduce the eligibility and the numbers don’t drop substantially where Lounge capacity utilisation falls, it should be fine.

The current trend should also lead to creation of Premium Lounges (For Business Class etc), where the freebie seeking crowd is not allowed. That may lead to incremental revenue for DFS.

Disclosure : Invested.