Vedant Fashions (Manyavar) – Niche Branded Retail

Risks mentioned in the article:

1. There’s the valuation for starters. It’s trading at over 100 times its FY22 earnings. Meaning people are willing to pay ₹100 for every ₹1 that the company makes. And that’s crazy.
2. Then there’s the concentration risk. While the company has nearly 600 exclusive brand outlets, the top five franchisees account for 30% of revenues.
   And while being completely based in Kolkata has helped Vedant Fashions become more efficient, the geographical concentration has a flip side. Natural or manmade disasters could have a significant impact on their supply chain.
3. There’s also the competition. Big names like Reliance Retail and Aditya Birla have noticed that the organized wedding apparel market is still in its nascent stages. And they don’t want to miss out. So Reliance has been aggressively acquiring various established designers in the recent past. We’re talking brands like Manish Malhotra, Abu Jani-Sandeep Khosla, Ritu Kumar, and Satya Paul. Even Aditya Birla has struck deals with Sabyasachi, Tarun Tahiliani, and Shantanu & Nikhil to grab a piece of this pie.