Attaching the transcript of the proceedings of the AGM. The MD Mr. Shuja Mirza has shed some meaningful insights on the working of the Co.
For starters, not only is the market for sports shoes as a whole growing rapidly organically, the even bigger growth is coming in the shift from the unorganized to the organized sector. Further, the Co. currently is concentrated in the northern part of the country & the scope for geographic growth to newer markets in different states is immense. The Co. is gradually increasing its reach. The coming 3-4 years could be years of high growth. The Co. is also looking to add to its ever increasing range of products by looking to enter the luggage industry once the turbulence in the retail industry settles down in the next year or so.
As regards the perception of Redtape being a discount brand, the MD clarified that the Co. is working on very decent & industry leading operating margins & giving discounts on MRP is only a strategy as it appeals to the Indian consumer’s psyche who enjoys the whole shopping experience more because of the discount, thereby making it a win-win for both the Co. as well as the consumer!!
There has been a lot of debate as to how Redtape should be valued. Investors are not clear as to whether it should be valued as a footware or a garment manufacturer. The fact is that Redtape is neither, but a fashion company & needs to be valued as such, given both, the potential as well as the visibility for growth.
No stock goes in one direction & there will be corrections periodically, but investors need to track both the growth as well as the margins & take a call based on this reality. We are already into the second half of the year & soon we will start extrapolating numbers in 24-25. As of now the stock is under owned with only a couple of mutual funds invested in the Co. Fund managers typically have a longer time horizon & if a few more take a fancy to the story, then the journey could become interesting!
REDTAPE Transcript-of-AGM-September-30-2023.pdf (128.3 KB)
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