Any “turnaround” opportunity merits discussion of the past to understand the scope of the turnaround. What is it turning around from? What went wrong? Why do we think it will do better? Is it because of change in management or tailwinds or fresh capital or some product revamp or something else? Discussing the past of a company in a turnaround investment thesis is essential for gaining insights, learning from past mistakes and setting realistic expectations.
How did you arrive at the “10-15kcrs marketcap” number?
If management execution was not good, then how can we expect them to do better? Will fresh capital and tailwinds make the management better? Or, do they need a new management?
For example,how did the management handle the labor strikes? Despite crores of funding and industry tailwinds, will the company will keep making losses if the labor strikes continue? What is the management doing to prevent future labour strikes?
Of course, the future potential needs to be discussed. An all encompassing discussion must involve everything in the company including its past failure, current tailwinds, future potential, etc.
All counter arguments are equally, if not more, important than positive reinforcements. I would be glad to know every opinion or idea on the hypothesis – both the positives and the negatives.
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