I think Vedant Fashion is a very well run, asset light somewhat seasonal business with a long runaway for growth, which as of now is very reliant on one brand. A lot to like but very hard to get valuation comfort when its trading above 50x forward earnings.
A couple of concerns I had –
- If you go to a wedding do you want to be seen wearing the same Sherwani, lehenga as someone else? I personally think its great but don’t think everyone shares my view here. A risk that remains, especially for a brand like Mohey.
- While it may not be a concern but I do believe that with scale, production will not get easier. Basically if production is to double or triple, will they be able to find similar high quality vendors as they do right now? (A happy problem though, as that means you are growing)
Done a deep dive on the business and shared some of my thoughts here.
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