I have a question, and if someone can please help me understand it, will be helpful.
LT Foods has consistently maintained 10-12% OPM over a long period, whereas the same for KRBL/Chamanlal Setia is not reflecting. Checking historical price trend of Basmati Rice (C Setia page 18/35) , I find it surprising how they have managed to maintain these margins. Their annual report mentions strong brand allows them to pass off these hikes to customers, but then India Gate is also a strong brand, however they can’t maintain it.
Can someone please throw some light on how this works? Is pricing for Finished goods different in US and EU? Logically, if RM and FG are both subjected to such fluctuations and there is a gap of 1-2 years in transactions, they should be impacted by this, correct?
As I close my research for this scrip, this is a big pt in my mind. (Risk being that actual OPM is quite large and they are skimming off in good years and putting something back in bad years)
I have no investment in this, and I am studying as of now
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