Would like to differ respectfully here. My point based on the above scenario - there is no risk of re-investing here as once you are through with 30-40% CAGR for 2-3 years invest that money into the 10 yr 20% compounder straight away. right? More money at the end of the day. So I would invest in 30-40% company for 2-3 years and buy the 20% compounder at the end of 3rd year.
Anyway, different opinions make investors!
Argh...Japan: India in the near future can never have a scenario like Japan as we are a growing economy. Deflation is only for this year as it's an YoY comparison and while we move onto next year it would be inflation in low single digits.
Agree, If Page falls, it would be a very good opportunity to ride the economy turnaround.
Disclosure: As already made, I'm invested in Page. I read somewhere that stock markets discount any macro positive turnarounds about 6 months ahead and any negative turnaround markets will be a bit late to discount 
Deflation always comes with volume de-growth. Just take a look at Japan as folks postpone purchase in anticipation of lower prices. However, this doesn't apply to Page since it is like stable consumption which can't be postponed indefinitely wink:
Disaster already happened with all major consumer brands like Hawkins, TTK,Cera or whirlpool but Page was standing tall. In case it falls below 5 digits, it will be a good opportunity to add.
Eco turn around is quite sometime away but Page could recover even before that.
Varadharajan, I will have to look in detail about their raw material cost compared to CaeserStone, I remember reading CaesarStones AR and finding that most of their raw material comes from Turkey?? May be a tiny bit from India. I am equally curious how much is the raw material cost for Quantra and whats the contract with supplier. It makes me nervous that they claim to have only one supplier, I am interested to know the kind of contract they have with Chettinad. More later on this.
You raised another interesting question, why sales grew only beginning 2014? I have learnt that setting up a quart stone making facility 2 years. And then, I feel they had very marginal sales from Quantra and I think it took time to convince the dealers that its quality is on par and still economical. I have spoken to all of their dealers here, Bedrosians , Daltile and IMG. All of them said as long as its Bretton made the quality is on par with CaesarStone and likes. I think Daltile started selling Quantra only recently. Bedrosians confirmed me they will sell only Quantra Quartz stone and no other brand. I thought that was very positive considering (as Bedrosians employee claimed) they are top 2nd or 3rd slab dealer in USA. I would encourage you to call the dealers, so that we learn more and more. And lets continue questioning and we should try and talk to management.
Thanks-Mahesh
Thanks Sumit, nice points for discussion. Couple of points though -
With economy turning around (IF), I'm looking at this high volume growth to offset the no/lesser annual price hikes.
IF there is volume de-growth coupled with inability to increase prices for a company like PAGE, imagine what will happen to other consumer companies like Whirlpool, Hawkins -> Disaster!
Asian paints with 10% (approx.) growth commands a good high PE, so I think Page could sustain premium valuations ALBEIT may not be as much as we are used to?
Well, you guys need to be aware of the latest developments. Mgmt has indicated to a few analysts that even second qtr is panning out to be like first one. The corrective steps will have positive impact only third qtr onwards. I have different take on Page's performance. Page's ability to take price hikes is dented like Hawkins since inflation is in negative. Large part of Page's earnings have come from annual price hikes along with volume expansion of 15-20%. Volume expansion has declined to below 15% which is quite good in this slow growth environment. PPI deflation is getting difficult to handle. If the earning growth is just 20%, real growth is 25% (20%-(-5%)) where PPI is -5% from previously real growth of 33%-8%=25% when 8% was inflation and high earning growth. But our mind is wired to look at nominal growth.
To me it looks like more than a bull market correction and it could be a process to de-rate Page. Mr. Market has its own mind and interesting things do happen.
Disc: Invested with the largest % holding
Any updates from the AGM?
I don't understand what is the issue here. They have mentioned that accounting rules provide exemptions to publish full financials of subsidiaries.
Company issued FCCB in USD to fund quartz capex which was supposed to bring USD revenue. The mistake they did was that it was not hedged leading to almost default like scenario. It takes sometime to build a biz. You can't start selling a product is US by opening a shop.Customer qualification, brand building etc takes time and then comes inflection time.
Quartz mines are not owned but it is not critical since it is widely available material on this earth. It is almost like lifting dirt from earth.
Granite mines are owned but not fully utilised and they buy from other mine owners too on which they don't need to pay royalty.
One should know that granite and quartz are minor minerals where it is the state which gives mining license and royalty is generally very low.
Why it is important to know "when" they got mining license. They are more than twenty old yr company and granite is their main business till few yrs ago.
Ok - thanks - i stand corrected. if the company is sourcing its quartz from a third party, it begs even more questions.
look at ceaser stone's RM cost it is 50% of sales at a realization that is at least 2-3 x of pokarna's as per this thread.
Pokarna claims gross margins of 70% incrementally - that means their RM cost has to be 20-25 % of their sales - which by itself is only 50% of that of caeserstone's in terms of yield. So, that begs the question - if chettinad being a rational seller can sell anywhere in the world, why would they sell to pokarna at a lower price when cesaer stone claims to be sourcing from india too and chettinad might as well sell to them for a logically higher price.
And in any case they had this bretton stone agremeent from 2010, why is it that only after april 2014, their sales soared ?
And for such an important subsidiary, why are detailed financials not given - what about environmental clearances, PCB clearances etc. on the subsidiary ? Also, why take a FCCB and loan it to the subsidiary in turn - why could'nt the subsidiary itself have raised money on its own with corporate guarantee ? Was it to prevent detailed disclosure ? So many RPT all over between pokarna and PES
The first question would be to understand the entire supply chain and how they are managing all these clearances in the subsidiary and what has changed post FY 2014. I pass no judgements - when facts change I change my mind.
in valueresearch SKM has 3 times the profit of tasty bites,better margin,ROE and PE
this year SKM has already run a lot , but can these two be compared and more growth be expected in SKM