This seems to be the case of a management with very high business acumen operating in an gruesomely competitive segment that seems to have somehow found a niche and is thriving as result.
One thing I don’t understand about their business model is the fact that the management said that the inventory in their stores in on the books of the OEMs. Then they also said they operate through cash and carry model. Aren’t these two statements contradictory to each other?
Basically, at what point of a product’s lifecycle do they purchase it from the manufactuer?
The RoCE of this business is simply crazy( in a good way). And valuations are not unreasonable as well.
This might be one of the best businesses I’ve ever seen (other is music licensing but this is much tougher to run) if they can deploy the capital they’re generating at high rates.
Anyone have any indications as to the Return on Incremental Capital they can achieve?
Concerns:
- Promoter selling huge quantities.
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