Valuation at 50 P/E shouldn’t be such a big concern for the small cap consumer company which is expected to grow volumes in high teens (17%-19%). Some strong pointers for FY 23-24:
- Valuation at less than 30 Price to cash flow from operations
- Strong working capital cycle with ability to convert cash in less than 40 days
- Potential to grow revenues at 25-35% (Company itself indicated reaching 2400-2500 crores in next 2 years)
- Expansion in south and west is going to play a significant role, so lot of headroom for growth.
- Company’s stock price is in stage 2 and hence indicates strong buying momentum.
Disc: Planning to invest in the business.
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