In the Q3’FY23 earnings call, the management mentioned that FY23 would be the base year for FMEG and profitable growth should happen from FY24. So I think it’s worth watching a few quarter, at least, to see how they scale and whether the levers mentioned (realignment of distribution channel, premiumization of offerings, brand marketing, etc.) do in fact aid in scaling up this business.
I’m faith of said scale up, given:
a. management’s demonstrated track record in entering new segments
b. when asked about the possibility of entering kitchen appliances segment
this shows focus and gives me confidence that the entry into FMEG wasn’t a spur of the moment decision
That said, FMEG scale-up should be thought of as an optionality and not part of the core investment thesis for this business.
Disclosure: Invested from 2100 levels; Forms a ~10.5% position at a portfolio level. Keen to hold with the expectation that it could compound at 15% CAGR for 3-4 years.
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