Generally FMCG cos are valued highly becuase of the consistency in growth and lower cyclicality in margins. But when it comes to innerwear cos (exccpt for page) both the growth and earnings were cyclical and would probably stay same is future. So, calling this a FMCG co and justifying the FY26 P/E is a risky bet. Eventhough the management has given guidance of 2000 cr, It’s difficult for both management and investors to predict how the cycle would play out. So, we should take management guidance with a bucket of salt.
I’m not saying the guidance could be achieved. They may or may not achieve it and may even surpass margins guidance. But, we should not predict it and justify 15x 2y forward P/E to such business.
It’s a different ball game if one can invest and hold till the cycle turns around (it may happen in 6 months of 3-4years, only god would know).
It’s always better to look at alternatives while investing. As per me currently good businesses are available to buy instead of dollar. For ex. HDFC Bank, Kama holdings (Hold co of SRF Ltd), IIFL securities, Fino Payments bank, South Indian bank, Vishnu Chem, Mayur uniquoters could be better alternatives from my tracking universe.
It’s upto each one of us to look at our tracking universe and weigh current co (Dollar Ind) against them and decide for oneself.
DIsc: Just sharing my thoughts. No reco to buy or sell. Holidng some of the cos mentioned
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