Hi @Bull_Miller ,
This is a good detailed write up on the business update regarding Panasonic. It seems like a safe company to invest in the microcap space. But I do have a few questions on Panasonic and dry cell battery market in general and I am hoping you could help me with those.
The total addressable market(TAM) for dry cell batteries in India is ~ 3000 Cr right now. Almost 50% of this is unorganized. Panasonic has a 20% market share already from the organized space. The dry cell market size might grow at 4-6% every year. Don’t you think that there is very limited scope for growth in terms of revenue with such a limited TAM ? What could be the maximum revenues that Panasonic can achieve in the next 5 years? It seems like a tiny market space with multiple players at work.
I was looking up at the price range for Everready batteries and Panasonic on Amazon. Set of 8 AAA Alkaline Evolta Panasonic battery costs 252 Rs after Amazon discount.
Set of 10 AAA 1.5 voltage Alkaline Everready battery costs Rs 189 after Amazon discount.
Why do we have such a huge difference in pricing here? And even after that the margins of Panasonic are less when compared to Everready! Am I missing something here? Please help me understand this discrepancy.
Panasonic does not have a manufacturing facility for Alkaline batteries in India. So it will be totally reliant on Japan to get the batteries. Do you know what is the business arrangement between the Japanese entity and the Indian entity? Shipping the batteries over from Japan doesn’t lead to any overhead costs ?
Currency fluctuations can have a significant impact on the margins depending on what arrangement the 2 entities have right now.
Isn’t the growing market for smart homes where everything controlled by mobile phones a big risk to the battery segment general?
Sorry for the long post but was doing some analysis on the company as it seemed interesting and would love to hear your thoughts before I decide to take a position. I might reach out to you again if I have more questions. Thanks in advance!
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