Isn’t this Ruchi Soya? There is already a thread on Ruchi Soya, so please add your comments over there.
Posts in category Value Pickr
Tanla Platforms ~ Leading player in the fast-growing CPaaS market (02-09-2022)
We will get to know that on 8th. If they go for a tender offer buyback then max size of buyback can be 175Cr. If they go for a market buyback then max size of buyback can be 70Cr. For a tender buyback they need to pass a special resolution first.
Only a 25% tender buyback will move markets significantly IMO, the 10% BB was expected and may have been discounted.
Tanla Platforms ~ Leading player in the fast-growing CPaaS market (02-09-2022)
Given the cash position and the current market price well below their last buyback price, I hope the size of buyback is big this time?
My mistakes with the stock market (02-09-2022)
Entered Tata Power @29 during Covid crash and exited at 58. The rest is history.
Been tracking HAL for a long time since it was t 1200 levels and watched it fly… sitting on the sidelines
Owned KRBL for a year, throughout their promoter’s court case issues and decided to exit around 260, its gone past 300 now.
Time in the market beats timing comfortably provided you’re holding quality companies.
Route Mobile – Internet, Mobile & Telecom (02-09-2022)
Raise money, again raise money even after having good cash on balance sheet, do buyback just after QIP, sell near 1% stake just after buyback!
Its high time the management should clarify all the capital allocation/ equity decision they have taken since ipo in detailed manner!
Its a MAJOR RED flag according to me!
They were proudly saying during ipo that they have never raised money and all growth was organic and through internal accruals but as the IPO gets into the market this happens:
Tanla Platforms ~ Leading player in the fast-growing CPaaS market (02-09-2022)
Buyback Board meeting announced. This is along expected lines.
ASM Technologies – Engineering innovation (02-09-2022)
My app shows a price of 470.05 for ASM Tech’s Partially Paid Rights shares. So far, I haven’t seen anything from management regarding when to make the full payment for these rights shares.
Demergers on the radar (02-09-2022)
Not tracking Aarti Industries for a while. What happened to the Pharma division demerger? It was approved in Aug 2021.
Campus Activewear – betting on the India Consuption Theme (02-09-2022)
Campus Activewear Ltd - The company manufactures and distributes a variety of footwear like Running Shoes, Walking Shoes, Casual Shoes, Floaters, Slippers, Flip Flops, and Sandals, available in multiple colors, and styles, and at affordable prices. !7% India Market share as of 2021. Mens Centric brand 88% sales came from men’s segment. 4.6% from women and 8% from kids
Management
Hari Krishan Agarwal Chairman and Managing Director
Nikhil Aggarwal Whole-Time Director and CEO
Archana Maini is the Company Secretary
Raman Chawla – CFO
Employees – 784
Competitors - Bata (Power), Liberty (Force10), Relaxo (Sparx) and Mirza International (Red Tape Athleisure and Bond Street)
Big Picture Narrative - Per Capita Income increase, need for different types of shoes based on occasions, fashion statement, the rise of women in the workforce, kids segment, people going for more casual shoes in day-to-day wear
Total SKU - 6388
Campus Average Selling Price 600/700
Metro Brands - 1200/1400
Raw Material - raw materials such as leather, rexine (registered trademark of an artificial leather-like fabric), inter-lining, PVC sole, rubber, net, cotton, etc. China and other Asia Pacific countries are the largest exporters of raw materials required for producing footwear. RM cost 55% as of 2021
Inventory - We usually keep two to four months of inventory of raw materials at our facilities. The ability to store raw materials at our facilities enables us to withstand disruptions in supply as well as volatility in the price of raw material. We plan our inventory levels based on existing inventory levels, inbound delivery timelines and expected order pipelines.57% of assets as of 2021
Receivable at 34 % of total assets as of 2021, they give 90 days credit to distributors.
Campus has more than 85% raw material sourcing from the domestic market, which provides it with significant supply chain efficiencies while maintaining quality standards through 100% in-house assembly
Being in Latest Fashion trends is extremely important for this Business-
We have adopted a fashion-forward approach to new product launches to ensure that we have a faster design conceptualization to product commercialization cycle. We are typically able to launch our products within 120 to 180 days from the date of product conceptualization…
New launches take 120-180 days from design to Retail. It allows them to do two season launches in a year. 48-member design team. Designing for a season begins nearly six to eight months prior to the upcoming season. The sketches are sent to heads of departments and key decision makers. Thereafter, our prototype team makes prototypes of our products using samples in various colors.
Debt/Equity 0.43% . Total debt 174 cr as of 2021
Profitability -
Campus cant convert its higher EBITDA Margin to PAT Margins as compared to Relaxo.
ROCE -
India Market Size & Growth Prospects (Athleisure) - India is mirroring the global trend with respect to sports and athleisure and outpaced the global growth rate of the segment. It is estimated to be ₹ 19,500 crore. It is estimated to be ₹ 19,500 crore (USD 2.6 billion) in FY 2020 and is expected to grow at a rate of approximately 16% by FY 2025, almost doubling in size.
Domestic Footwear Market - The domestic footwear retail market in India estimated at ₹ 72,000 crore in FY 2020 is projected to grow at a CAGR of ~8% to reach ₹ 1,05,000 crore by FY 2025. Footwear industry in India has grown at a CAGR of ~9% over FY2015 to FY20
Manufacturing Capabilities - Total 29 million pairs capacity. Haridwar Facility is responsible for manufacturing our uppers, Ganaur Facility is responsible for manufacturing 37.50% of the soles. Dehradun Facility, Baddi Facility and Campus AI Baddi Facility are responsible for assembling all of our products
Outsourced Job Work - Our cost of materials consumed includes job work charges for the manufacturing process, it was 10.62% of the total revenue
Capacity Utilization -
Dehradun & Baddi are at an average CU of 75%, Im not sure if in the footwear industry factories operate at 100% CU, If that isn’t the case then they will need Capex soon. IF they don’t have enough internal accruals, they might have to raise debt or do QIP. The reason I am looking at these two units only because they do 100% assembly in house. A significant portion of Upper and Sole manufacturing is outsourced
Product Pricing -We sell footwear across the entry-level (MRP at or below ₹1,049), semi-premium (MRP between ₹1,050 and ₹ 1,499), and premium (MRP at or above ₹ 1,500).
Revenue contribution from the Premium category 41% in 2021. Average Selling Price 615 as on 2021. (ASP of 615 indicates a Mass market appeal)
Pricing Power - We do not have any specific retail policy and standards for “sales made through distributors”. We do not control the price at which the ultimate retailer sells our products.
IT Capabilities - These tools include systems for enterprise resource planning (ERP), distribution management system (DMS), field force management, point-of-sales (PoS), e-commerce order management (OMS) and a retailers’ engagement application
GST Tax Mismatch -
Campus Distribution Details -
Trade Distribution – 75% - Volume sold – 81 %
Direct to Consumer Online- 21% - Volume sold – 16%
Direct to Consumer offline – 3.50 % - Volume sold – 2.5%
Internal Sales Force of 152 employees - they use Sales Force software for Distribution Management System
They also have a Retailers Engagement App
We have over 425 distributors as on December 31, 2021. We are dependent on our trade distribution channel for the majority of our revenues from operations. We have 57 COCOs and 28 Franchisees as on the end of the period of December 31, 2021
Geography Concentration - 68% of the revenue comes from North India
Business Seasonality - Historically, revenues in the third and fourth quarters have exceeded those in the first and second quarters. The mix of product sales varies considerably from time to time as a result of, among other things, changes in the season
Refund & Exchange - Trade distribution We have a return product policy for all our trade distribution customers. Our trade distribution customers can only return products in case there are any manufacturing defects. In such instance, the distributor will collect all defective products within a period of six to eight months from the date of purchase of goods and inform our sales representative. The distributor will thereafter cut / destroy all defective pairs in front of our sales representative to prevent any misuse. We will thereafter issue a credit note in the name of the distributor
Usually, apparel, shoes etc manufacturers have some amount of provisions for returns in the Balance Sheet, need to find out what is the annual provision percentage to sales. 2022 AR not out yet
Advertising spending is at 6/6.5% to total sales.
i have a tracking position, and will be adding as the story develops. at the onset, i like the company and there is good growth in revenue and profits. it fits well in the consumption theme. the asp of “615” caters to a huge section of the population so long term growth story looks good. They will have to keep coming up with new designs to be relevant in the market. Adidas, Puma, Nike are constantly launching new designs. its a very competitive market. however at a lower price range, probably CAMPUS has an edge, time will tell. Waiting for their 2022 Annual Report
Sources - DRHP & Concalls
Easy Trip Planners (Easemytrip) – An outlier in OTA (02-09-2022)
20%? 25%?
starting next year, (ignoring the base effect), it will grow at 6-8%, the 2 airlines will have 90% of market share (tata owns airindina/vistara. air asia)… supplie direct will increase too
now what p/e you will be comfortable buying and what growth in profit would you expect form next year after the low base thing is of the past