Tips has done extremely well over the last few quarters and provides a very strong guidance for the next 2-3years with 30% Topline and Bottomline growth. However, what puzzles me is the answer to few questions during the Q2’FY2024 Concall.
- Capital Allocation along with sustainability
The company has made a turn around with going digital approach. What is next for sustainability ? Giving dividends and buybacks is good for shareholders but where is the growth strategy ? SImilar was the case in ITC where dividend payout was extremely good but with a missing growth strategy, the stock price was sideways for over 4years.
- Management Change w/o clear R&R
The top slot in the company has been changed and 2quarters are needed to clarify R&R ? Not a very convincing response in my view. A strategic position needs have a clarity on R&R before head hunting and the execution of plan or transfer of responsibility can definitely take few months. This makes me think why TIPS went out in the market to fill the position and not elevate someone internally ?
I would definitely like to revisit the Concall after a couple of quarters and see a growth strategy charted out which can result in company’s growth strucutrally. No concerns observed for meeting the targets for FY2024 but makes me think if this is already priced in over last 6months.
Disc: Not invested
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