I can add a bit although question is directed to Rajeev sir.
- Despite the current fall stock is up. 2x in last 1 year. After such steep rises stocks can take breather in middle as participants with shorter time frame (momentum chasers) get out & are replaced by investors with longer time frames
- This is not isolated. Have a look at other footwear cos like campus. They have also seen a huge fall
- There can be some concerns about discretionary spending going down due to high inflation
- As per my channel checks co is doing fairly well biz wise in Q3 as well as per limited discussion with some store owners & investors who have talked to such store owners
- You can see on Google trends that the longer term organic interest of indian public in red tape brand is at an all time high right now.
Whether and to what extent this interest translates to actual buying will be revealed post Q3 results
- This is actually not such a large co mcap wise. Smallcaps can fall decent amount even on smaller selling. Even other cos with strong biz momentum like Navin fluorine, Gujarat fluorochem have fallen below 200 dma.
- Could be a market wide adjustment to higher interest rates (discount rates going up will drive down multiples no matter what, incremental capital might go to bank FDs with some banks offering 8-9% now)
At end of day, biz has to speak for itself. If co can grow 20-25% then i don’t see how these prices or multiples will last. If co cannot deliver 20-25% growth then i personally would be happy to sell out since my style is more of biz momentum.
Disclaimer: invested & biased. Might sell without prior notice.
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