Hi Varadharajan,
Thank you for the update. While the management seems to be quite intent on growing the business, you are correct that there is no moat. In fact, I never got into ITF thinking there was any moat. However, a home grown fashion retail brand with decent quality is something I feel will do well. At the same time, I was a little ticked off by the management not responding to my queries, both through email and through physical post. They also haven’t sent me a physical copy of the AR as I had requested. However, I do realize some managements are just not responsive, though this does not mean they are not working to maximize shareholder wealth.
Can you please explain to me what you mean by adding inventory to increase margins? I do not understand how the margins are increased by adding to inventory (and hence WC). Can you also explain to me how this is tied to the Accounts Receivable? It seems to be they are using the QIP money to do exactly what you’re saying, apart from setting up new stores. Does not seem a very efficient use of the capital, according to me. However, from recent disclosures and news I have come to know that some PE funds are still picking up shares around the 600 mark (Malabar Fund being one that picked up a big chunk around 600 a few weeks ago), so maybe the management does have plans to rectify this aspect in the near future.
I apologize if I sound quite uninformed about these concepts, but I try as much as I can and learn from individuals like yourself.
Regards,
Tushaar
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