Was on the management call today.
The MD said that the margin contraction is due to inventory losses booked in the quarter. Net of inventory loss, the business is running at a steady 28-29% gross margin.
He said that if inventory losses were to be ignored, Q2 would have been the same as Q1FY16. In that case the PAT would have more than doubled compared to Q2FY15.
He also said that he doesnt see losses on this account in Q3.
The story remains intact…added some more position today at 720.
Mcap when posted : 1261cr
Disclosure : 13% of portfolio. average cost of acquisition is above 800
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