Company continues disappointing on their guidance, some or the other thing keeps becoming a hindrance in their growth. Currently, they are struggling because of footwear and auto export slowdown due to strikes in US. Concall notes below.
FY24Q2

• PU sales: 2 lakh sq.m with 1 lakh sq.m sold in October
• PVC sales: 70 lakh sq.m (same as Q2FY23)
• Exports (52 cr.): export general (15 cr.), export auto OEM (37 cr.)
• Sales growth was 40% in auto replacement, 12-13% in domestic auto OEM, 5% in other segments. Exports were down (-20%), footwear was down by (-20%). Footwear saw inventory destocking due to BIS enforcement and auto exports was affected due to strikes in USA
• Current export OEM run rate is 1-1.25 lakh sq.m which should increase to 2.5-3 lakh sq.m
• Hopeful of reaching 850 cr. in FY24
• Next 6 months will see ramp up in auto exports
• Retail furnishing: 400 dealers and should reach 600 in next 6 months

Disclosure: Invested (position size here, no transactions in last-30 days)

Short term borrowing (STB) is from Bank in the form of Over draft (OD). It is backed with Account Receivables as Collateral (Src:AR)

As some portion of Trade Receivables (TRs) is already used / received indirectly in the form of Short term borrowings, the same needs to be adjusted from the overall TRs…that’s the reason it is shown under Operating Activities → Adjustments for Changes in Working Capital so that this STB amount is deducted from the TRs

For example, if the total TRs is 100/- and from that company has already used 40/- in the form of STBs / OD …then the balance TRs has to be 100-40 = 60/- and can’t be still shown as 100/-

Incorporated in January 1989, ‘Swiss Military Consumer Goods Limited’ (formerly ‘Network Limited’) had been taken over by the present promoters in September 2020. It is Headquartered in New Delhi. It is trying to find a firm placing in the immensely competitive yet significantly stimulating Indian market.
The brand symbol in itself makes it an aspirational brand for the Indian middle class.

The opportunity size or the TAM (Total Adressable Mkt) is huge. Swiss Military Consumer goods places themselves to the customers as a Premium Brand at an affordable price.

Growth strategy

Presently, the brand has a presence across 1,000 touchpoints.

The company is eyeing 10,000 touch points by March 2024. It is yet to be seen if they will be able to achieve it.

The product mix is a very diverse range, however, for a very small market cap company, they have been able to rope in Randeep Hooda as their brand ambassador.

A simple Amazon.in search for Swiss Military yields a large number of products up for sale.

At the first look of it, the products have been prepared with an aesthetic sense and ergonomic designs.
The India room heater market size was estimated at USD 90.6 million in 2022. During the forecast period between 2023 and 2029, India room heater market size is projected to grow at a CAGR of 8.1% reaching a value of USD 151.8 million by 2029. The demand for room heaters is increasing at a high rate in India owing to the rising disposable income and increasing launches of new and affordable products and brands.

It would be interesting to see how their newly launched oil radiator heaters do in the market.
https://www.amazon.in/Swiss-Military-Fin-OFR-Heat/dp/B09QCXN6Y2/ref=sr_1_1?crid=1J3FEKT3V5DYS&keywords=heat+max+swiss&nsdOptOutParam=true&qid=1699727952&sprefix=heat+max+swiss%2Caps%2C226&sr=8-1

India being the fastest growing economy, the inceasing pay levels, penetration of electronic devices and laptops, are all growth trigger for the company, for its extensive range of laptop bags. India in future is going to be a net exporter of laptops and tablets. India’s laptop, tablet exports to reach $100 billion by 2025: ICEA report | Laptops-pc News
Laptop bags go as a complementary product. The scale at which the company can produce, the Swiss Military brand tag, places the company in a sweet spot to tie up with one of the reputed laptop producers to offer its products.

The promoters seem passionate about what they are doing and their push is visible in increasing revenues.

To be continued…

I can add a few Indian examples on how the respect that a company commands reflects in its Annual Report. I am not saying that that is the only factor which propels its growth, but it is a significant factor. Of course, no company can blossom just on smiling faces.

The first example is Titan. Everybody knows that jewellery bought from Tanishq comes at a premium. But we yet buy our jewellery from them because of the trust that they command.

Then, IDFC First Bank. People may open their accounts in that bank because of the higher interest rates offered by them, but they stay because of the customer-friendly culture in that bank people often talk of.

My wife loved the Lord Krishna bank because the staff made her feel so welcome and important despite the fact that her account never had large sums of money.

I would like to get my hands on the financials of Air Asia and Vistara. While Vistara staff usually comes in for praise, the Air Asia crew and the ground staff are said to set standards of rude behaviour. So, do the travellors decide to bear with that because of the low fares? I am not sure.

There may be many companies which do not come into contact with its customers. A Tata Steel or a Dalmia Cement for example. So, my post was of course was about companies having direct interaction with its customers.

The trend is catching up. As per input from a friend who visited a Bagline store recently, the Aug sales were 12 Lac and Oct sales were 15 Lac. The latest Tommy gear is selling well.

Also checked up at Shoppers Stop, the Tommy luggage was up on display to be purchased as sales promotion at discounted price.