Thanks Gautham, I agree with your thesis.
@NikhilJain, just take my views for what it is worth. We cannot take someone’s exit multiple as base and arrive at PE. Market will not oblige us in both upside and downside. There is a HIGH price to pay for predictability and sustainability. If page can grow at 35% fo the past 6 years when the economy is not very good it can very well grow at at least 25% when economy leaps. So EPS after 10 years would be 1840. Coming to PE, I would say it will sustain 50 PE if the business maintains its current high ROCE, ROE, Dividend payout, Cash flow. Capex also would have been reduced by then. In which case the price would be 92000 plus dividends each year. I myself do not like to predict 10 years ahead. I would only go 3 years from now and I believe Page could be a doubler from here in 3 years and I’m happy with it.
Generally, companies like Page will be valued at “X times Sales”. I would say page can command 7 times revenue. Currently it is at 10 times sales. So reverse engineering from my above paragraph, would Page attain a sales of 13000 crore in 10 years? Let’s see. I think Page can command 25% market share. Market size for men, women, kids, swim wear in aggregate can be 75000 crore.
Very forward looking statements, so please feel free to sideline me.
@Donald and other admins, I think the last few opinions on page could be moved to Page thread.
Disclosure: I hold page in my concentrated portfolio and I’m not good at predicting stock prices, just that you wrote next 10 years from your view, I wanted to pitch in with my view. Of course, if the current business case changes I would exit.
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