Deepak,
If you go through co’s conference call and presentations – they mention that 80-85% of the business is from replenishment – implying recurring nature (the frequency may not be yearly though)
Also, the products – towels, sheets – think for yourself what would be the life of such products? naturally after every 1-2-3 years we would require such products again. Also, around 60-65% of business is from US – which is in great shape atleast in terms data coming out for home sales, etc. Welspun is increasing geographic reach by expanding in Japan/Middle East. They are also expanding their product base and now catering to hotels, etc wherein the frequency of requirement would be much higher. Hence, I believe management guidance of mid teens growth in revenue for next 3-4 years is very much possible and realistic I believe.
See these charts below to get a macro view on whats happening in US regarding home sales – which in turn would automatically translate into demand for Welspun’s products in addition to many many other home building/related products (think of Pokarna and its products, can be another good medium term bet)
In fact being export oriented is a major plus, I find export oriented co’s better relatively.
Disc: My largest holding and views will be biased.
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