Update:
I’m pretty bullish about the prospects. For a trading company at the end I believe FY27 it’s available at forward 8 EV/EBITDA, so not completely cheap. But a potential distribution market leader is available at 4000 crs EV. It technically is a market leader already however I would consider a company market leader when they gain meaningful % of market share.
And if things go right they should make 4000 crs Cumulative EBITDA in the next 7-10 years
As upstream steel capacity comes up, steel itself market will grow 14% annually for next couple of years.
Execution is not the problem here, and WC is also not a problem which is generally the issue with distribution companies. Margins however will remain paper thin.
Value proposition comes from consistent pricing for small players as well as larger ones.
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