Virat Crane Industries Limited (VCIL) – sure shot multibagger

Good point.

Yes, until 2014 the milk prices are on an uptrend, quoting a sentence from the indianexpress link in my above post:

“Between May 2010 and May 2014, retail prices of toned milk in Delhi went up from Rs 23 to Rs 38 a litre — a 65 per cent jump in 4 years. But since then, there has been no rise and the scope for it is also limited in the “near future”, according to R S Sodhi, MD of Amul, which last raised prices on May 9, 2014.”

Now some important points on why Virat now is different from Virat during 2010-2013 (based on posts in this forum itself by other members):

1. Virat had fake products issue (not that it is not there any more) but I think as we go along this issue will gradually subside.
2. The product went off the shelves due to dealers network and not so much from the company itself

When the above problems subside gradually, the revenue will see better growth (we are still on a very low base so lot of scope here)

So yes, the majority of revenue growth would have come from price increases.

However, as per the latest annual report (latest AR has better information in management discussion and analysis section compared to past reports) –

1) Management is proactive in generating revenue growth where they mentioned they want to expand to other geographies, new plant in Orissa to cater to Eastern states, brand extension.
2) As a logical extension to this low milk prices, revenue growth from ‘price realisation’ might be less as you rightly said, but this could be to some extent offset by point 1 as above.
3) However, the margins should get a boost and hence better RoE etc.
4) I think there might be ‘natural’ revenue growth owing to better GDP numbers during 2015-2018 as compared to 2010-2014 (at least this assumption should be made, if not, there are a lot of other sectors that will also get impacted like housing, consumption etc. and you cannot be in equity market
5) The whole ‘consumption theory’ picking up on which many other stock prices are at high PE (Hawkins, Whirlpool, Paints etc. etc.) while Durga is quoting at benign PE, so there is a very good scope of PE re-rating if the story pans out as expected.