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IMO

What vedanta fashion is and what’s the possible future prospect ?

1. I mostly feel the brand value is a big plus point. They’re already synonymous with wedding and festive wear in India and have great branding/ advertising and there’s market left to capture is huge.
2. The ability to penetrate throughout the world for Indian wear, at mid-premium and premium segment is not an impossible task.
3. If they can venture out to other wearable spaces associated with wedding and festive, there’s enough market left.

How does vedanta fashion valuation look like ?

1. At 25 times book value and close to 60 times pre-tax annual earnings, the valuation is very steep.
2. The only way to justify this valuation is there’s extremely long runway and huge tailwind. If company could double profit in 3 years (PEBT will be 30) and it still deserves a valuation of much higher than 35-40 times earnings with lots of run way left, there’s good chance of stock appreciation in this time.
3. There’s no alternative for company but to register great sales and profit growth without compromising margins and have continued future growth plans to justify current valuation.

What’s could be the future proof that vedant fashion is a wrong investment?

1. Losing brand value/ reputation in any sense.
2. Becoming irrelevant in the fashion space (Look at Raymonds today vs 1-1.5 decades before)
3. Not being the market leader in its own space.
4. Not having plan for sustained company growth and international expansion in after 3 years.
5. Long time underperformance in market.

With these considerations, I would be increasing my allocation in vedant fashion to 3% and monitor in which direction the stock pans out. This valuation is nowhere near healthy levels for investing good amount of money. It’s avoid / put minimal allocation in portfolio and monitor in the mean time levels. The advantage of having skin in the game for stock you are positive about is you’ll continue to think about it and when time comes to act decisively and load up, will be prepared well.

A must listen concall from All E technologies

Alletec Investor Call 06 November 2023

VA Tech Wabag has announced its financial results for the quarter and half-year ending September 30, 2023, reporting impressive figures:

Sales and Profitability:

• Consolidated Revenue from operations: Rs. 12,178 million
• Consolidated EBITDA: Rs. 1,636 million (13.4% increase)
• Consolidated Profit After Tax (PAT): Rs. 1,102 million (43% YoY increase)
• Standalone Revenue from operations: Rs. 11,134 million
• Standalone EBITDA: Rs. 1,534 million (13.8% increase)
• Standalone PAT: Rs. 1,011 million (70% YoY increase)

Order book:

• Order Intake: Rs. 13.17 billion
• Order Book: Rs. 121 billion, including Framework contracts

Mr. Rajiv Mittal, Chairman & Managing Director of VA TECH WABAG LIMITED, expressed confidence in their growth trajectory, emphasizing a focus on industrial, international, and multilaterally funded projects. Their strong order book position and commitment to sustainable, profitable growth with a positive cash flow are expected to continue in the second half of the financial year.