In continuation, Guys my apologies if someone feel offended as a valuepickr member I am trying to put my observations on this thread so that everyone invested here can have a relook in their conviction, our ultimate aim to protect capital and find right value of stock.
- Naayka has capital base of 287 cr shares now which i feel is increased to provide liquidity in stock for easy PE exit.
- Margins have dropped to 4% from 13% in Covid era as offline plus online mode started now which will continue
- I saw offline stores in Noida, Gzb, Delhi
- Customer response is not enthusiastic, even sugar doing better right now
- Intense competitive market where MAC, Sugar, Shoppers stop, Sephora, and upcoming reliance will eat up margin or growth will be difficult.
- Current market cap of 38000 cr with EV/EBIDTA ratio of 190 is unsustainable.
- Any poor results ( growth less than 35% atleast) will invite strong distribution
Fair market cap with current margins is no where justified more than 8000 cr which means stock may loose market cap by 75%.
Sorry to be blunt however please keep a close watch.
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