Only time will tell if the “potential” will convert to meaningful profits for all 6-7 players. Many players ventured into organized supermarket retail which was touted to have great potential about 15-20 years ago, but most of them are still loss-making or wound up (Future, Star, Spar, More, Spencer’s, etc), while only Reliance and DMart have managed to stay afloat profitably.

My 2 cents on Sula

• If one go back a bit, two of their CXOs (including cgi) left within 6-8 months of IPO – red flag.

• hiding more than revealing, e.g. in none of the mgmt interviews that followed Q1FY25 results, their was any indication of sub-par q2 performance.

• Business is solid but leadership seems to be missing ‘fire in their belly’ – I have not seen any serious attempts by the mgmt in last 2 years to expand their footprints, they continue to be Maharashtra/ Karnataka player.

Disc: exited my positions recently.

Fortunately the stock seems to have done well since the last post .
Recently it has become a 10 bagger for me . (First 10 bagger, did not expect it to be so fast )
The management seems to be using the raised funds to slowly acquire and integrate higher margin business . Considering EBITA of 30 cr from last quarter maintains for the coming quarters, the PE for sky gold will be 31 . So PE of 30 seems the right one to follow on long term basis.
If the profits increase which they seem set for after the acquisitions and various sectoral tailwinds coming in play , the PE can re-rate to 40 for sure .
With the current revenue guidance by the management for year 2027, the market cap of the company can go close to 10,000-12000 cr .
The management seems proactive and might figure out further engines of growth in the meantime as well .
Disclaimer: – Invested from lower 300 levels .