In my opinion, others are valued too highly as they have a horse that can count up to 10 even though growth or ROE or both are poor – Well entrenched brands in Premium/Luxury Category. For instance:

• United Spirits Ltd: Manufactures, sells, and distributes a wide portfolio of premium brands | comprehensive brand portfolio | brands that sell more than a million cases each year
• United Breweries Ltd: Products under the flagship brands Kingfisher and Heineken
• Radico Khaitan Ltd: One of the largest and oldest manufacturer of IMFL(Indian Made Foreign Liquor). Company has a wide range of branded portfolio across IMFL categories. Seven millionaire brands.

On the other hand, GSL is still perceived as a mass alcohol manufacturer (commodity chemical company – Input cost driven by commodity cycle and Finished good pricing dictated by market forces) who has just started to learn the ABCs of IMFL trade and will take lot of time and effort to graduate and join the big 3. In FY23, Total Revenue: 2103Cr.

• Manufacturing Revenue: 1357Cr. [~65% of Total Revenue | Prospect boosted from ethanol blending | Capacity will further increase in Steps +120 KLPD to come onstream from Q4FY23 and another 400 KLPD (Odisha+UP) in near future]
• Consumer Revenue:
  • IMIL: 709Cr. [~34% of Total Revenue]
  • IMFL: 37Cr. [5% of consumer revenue, 1.7% of Total Revenue after 6+ Yrs. of effort| Still Loss Making at EBITDA level | product, brand, marketing, and distribution are evolving]

Pole positioning of big 3 hints at the valuation that GSL can command if the IMFL initiative succeeds. One shall monitor the footprints of the IMFL initiative closely as that will mprove the overall margins and change the perception (E2E integrated player, stable margins in high double digit).

Hello Sir, How are you looking at EIL now ? I took my first position at 72 and kept building it until stock touched 100 (Avg Buying price came out to be 82). I rode the rally but then sold it at 140 and 120 when stock was breaking down because i thought that these were key support levels and i wanted to retain my profits.

Subsequently after the stock again broke 140, i have re-entered the stock to play the next rally. This has been more of technical trade (with fundamental backing) for me.

I wanted to understand how do you play these trades

1. Do you book your profits when there is decent correction (it corrected from 165 to 120) to protect your profits (admittedly it never broke 200 DMA but since the runup was so steep, dint want to lose the profits)
2. Do you re-enter stock after you have sold if it has resumed its uptrend ?

hello hitesh ji
hope you are doing well
some investor i wont mention name said in you tube video few days ago technicalcharts has only 20% chances in making money and fundamental has 80%…how will you read this ?

HCC Rights Issue announcement – https://www.bseindia.com/xml-data/corpfiling/AttachLive/cbe2bcba-361b-4d4c-ae79-c4df600f8732.pdf. Says “the Company has filed the draft letter of offer dated December 14, 2023 (“DLOF”) in connection with the Issue with the Securities and Exchange Board of India.”

Is it possible to get access to this DLOF? Is it publicly available or will that only be available after SEBI approval?

While I had not thought as deeply on the structural shift in Dollar as you have, I have also been watching the progress on the Project Lakshya efforts. I had initially built up a position in Rupa before deciding to invest in Dollar. Over the last quarter or two, I have turned more confident about Dollar.

That said, I have two concerns here – 1) There is still no signs of consumption recovery in the segments that these companies primarily focus on (maybe the elections will lead to a short-term bump up) 2) Competitive intensity seems to be increasing with a number of new-age D2C brands coming up. Examples include XYXX, Clovia, DaMENSCH etc. Unsure about their business models (as with most D2C startups), but so long as they are around, they could impact the sales of the traditional brands like Dollar, Rupa etc.

These two key concerns are holding me from increasing allocations much more now. Appreciate your thoughts here.