Praveen’s Portfolio

Hi Ram
There could be multiple reasons for MUFTI to fall.

1. Momentum: The co has so many shareholders who has bought in IPO and they may be going out of patience and selling the stock. I have seen the same thing happen earlier in newly listed IPOs
2. Fundamental Reasons: Whole industry (look at peers like Arvind has seen good margins and profits in recent quarters. While this may seem good, We could be at top of the earning cycle (peak margins).
3. Since the co. is recently listed, The financial figures are avaialble only for last 3 years and so growth has been good as we came out of COVID

My thesis:

1. Managment commentary suggesting the co cold double revenue in 5 years (14% CAGR)
2. I expected some rerating in P/E multiple combined with Pofit growth (bcz of Operating leverage)

Currently I don’t know how things could turn out from here. But if the co can keep growing at 10-15% the downside could be limited. Currently trading at 15x P/E. But not sure E (earnings) are normal or one off

Disc: No reco to buy or sell

Thanks
Praveen