hii Sahil bhai
One Question
If we look at their segmental revenue they have one segment of distribution business which is earning just around 6-7% margins whereas their other processed food business is earning 25% plus
So why is the management wasting time and money in low margin business??
They have answered that while distribution of other brands products like patanjali and uniliver they are able to penetrate their brands also …so my question was how sustainable is this strategy also don’t you think that capital and energy can be deployed in increasing our own brands ???
Also what do u think would be the margins of distribution business going forward
Management has said that right now business is in investment mode and fixed costs are very high once sales increase there would be an increase in margins so do u think there is any chance of operating leverage playing out in near future ?? ???
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