Hi @desaidhwanil Agree with your points. In fact I had looked at this company for the same reasons. And it looked interesting given they were launching the domestic brand. However, I do agree that creating a brand is a very uphill task in sock category. The company has a very small number of clients and they are very choosy before working with anyone, largely because of the terms of trade. They claim to have the best quality amongst all Indian mfg’s.
The dampner here was on growth. A friend of mine had attended the AGM and he mentioned that the promoters are extremely conservative and that is also one of the reasons why they aren’t working with many clients (This is largely positive in my view, though this has an implication on growth as well)
The key element of growth could be there domestic brand launch – ‘Lord Walker’.
I did try to do some on ground research on their brand it was just launched and not much info was available then. Maybe we can do more work on this and do some on-ground research about the pickup of their brand.
I think more than the brand – it will provide growth to the company. The base is small thus they can perhaps grow from here.
The space is seeing some action here –
http://www.business-standard.com/article/companies/renfro-india-to-expand-domestic-footprint-114102100903_1.html. Renfro which is one of the largest is a 400 Crore company and is now eyeing domestic market with their brand ‘Copper Sole’. They claim to be growing @ 15-20% as per the article above, They have an agressive target of 400 Crores over the next 5 years from domestic market!
Virat’s size is extremely small at the moment and getting a re-rating here is a function of growth in my view. Thus answering that part of the puzzle is extremely important.
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