Hi Inv and Rich,
I do not have a close understanding of the retail sector, or a specific stock like Rich does. I am a generalist when it comes to investments. And hence I stand a bigger chance to be wrong. From that vantage point, I prefer to stay in stocks that are disruptors, have longevity, and preferably a head-start.
Nykaa has longevity, its TAM is increasing. Cuz the management is constantly exploring, investing in growth. And it has a head-start. The next in competition is Purple, and it is 1/10 in revenues. Nykaa also has another special advantage of premiumization. Its products are NOT sold as commodities, but more like luxury. Moreover, i like to see Nykaa as a tech company, with last mile delivery capabilities. That puts them far ahead in the race of beauty and self care vis-a-vis the traditional distribution model. So yes they are disruptors. And in a market as big as ours a disruptor, a tech company, while selling widely established luxury products is in my opinion extraordinary.
Under the same theme I am invested in Dmart, Idfc First Bank. (Disruptors, Tech enabled, Proven TAM)
All three of them, have a headstart in disrupting an established model which reaches the entire nation full of people. That, I think, gives me a big advantage. I know, their products are going to be in demand, market is established, and these guys are good at aggregating the demand via tech.
My theory will start losing validation if their growth drops below 15% CAGR. I have paid a high multiple, have done nothing smart on that front. I wish I could find stocks at 15PE and hold them till 45.
Campus, Metro have been around for decades, nothing new there. I have not studied them, therefore, I cannot say for sure whether they are doing something unique. And the reason for this lack of interest is because I have my investments taken care of.
Vedant Fashion appears good. But, nothing extraordinary in my uneducated opinion. I will just have to second richz on this one too. I dont exactly see a sustained moat.
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