I would like to know Top 10 smallcap or midcap stocks you are holding for long term

My bets are
HGINFRA
KNRCON
NCC
VPRPL
MANAPPURAM
TMB
CAPLIPOINT
EQUITAS
TANLA
BSOFT

The gold finance business is highly operationally intensive. While entering the market is relatively easy due to the lack of significant barriers, maintaining and expanding the business on a large scale, as companies like Manappuram and Muthoot have done, is challenging. Bajaj Finance and many others attempted to venture into this sector but failed to keep focus
Similarly, many banks and non-banking financial companies (NBFCs) have tried their hand at gold finance, but often lose interest as it’s a single run business and most banks are intersted in 4s and sixes

The gold finance business is not easy to sustain.

Many triggers will help them
-benefit from an increase in gold prices, which boosts AUM
This advantage, combined with average growth potential, makes companies grow around 20% over long term

non-performing assets (NPAs) are not a major concern in the gold finance industry.
Before the COVID-19 pandemic, there was little competition in this space, but post-COVID, competition surged, which ironically increased the popularity of gold loans.

Despite the influx of competitors, demand remains high. It is estimated that two-thirds of the gold loan market is still in the unorganized sector. There is a gradual shift from unorganized to organized sectors, which is expected to drive further demand and growth.

Several factors act as triggers for the gold finance business: rising gold prices, the migration from unorganized to organized sectors, the perpetual need for loans, increased demand due to inflation, and the advantages NBFCs have over banks in terms of faster processing, better customer care, and longer working hours.

The gold finance industry is here to stay for the long term. Although competition may fluctuate, it is difficult for new entrants to sustain their operations over extended periods.

Only companies with a primary focus on gold loans will likely endure, while those whose main business lies outside of gold finance may struggle to maintain a foothold in this demanding industry.

In summary, while there are no significant barriers to entry, sustaining and growing a gold finance business is fraught with challenges. Over time, I strongly believe that Manappuram will see a significant re-rating from its current price, and this potential will become more apparent in hindsight.

But I think you can apply more shares than what you can claim rightfully. You may or may not receive the additional shares.

Electronics Mart India ltd –

Q1 FY 25 concall and results highlights –

Revenues – 1975 vs 1684 cr, up 17 pc
EBITDA – 154 vs 130 cr, up 18 pc ( margin @ 8 vs 8 pc ) Q1 margins for Aditya Vision are 10 pc
PAT – 72 vs 60 cr, up 20 pc

Product wise sales mix –

Mobile phones – 35 pc
Large durables – 53 pc
Small durables, IT eqpt – 12 pc

Total no of stores @ 170, out of which 13 are owned No of stores added in Q1 @ 10 stores

Avg bill value @ 24.19k vs 23.95k YoY

Same store sales growth @ 8.6 pc

Cash on books @ 95 cr

Geographical breakdown of stores –

Telangana – 101 stores
Andhra Pradesh – 44 stores
Delhi NCR – 23 stores
Kerala – 01 store

Telangana + AP + Kerala stores operating @ 8.3 pc EBITDA margins

Delhi NCR stores operating at 2.6 pc operating margins. Operations in Delhi NCR started in Aug 22. Company expects Delhi NCR stores to reach Southern State’s level of profitability in future

Total number of EBOs @ 12. Rest 158 are MBOs

Aim to open another 25 stores in the remaining 9 months and grow in strong double digits in FY 25 in terms of topline

The receivables present on company’s Balance sheet are the monies to be received from Banks / NBFCs for EMI / Credit card sales – generally it takes 3-4 days for the company to receive the money

Company’s stores in Delhi NCR are spread across high street and not not so well penetrated areas like – Burari, Najafgarh etc ( these r almost like tier 2,3 towns )

Despite the heat wave and accelerated sales of compression products in Q1, the gross margins for the company only expanded by just 30 Bps. The same is due to the fact that the heat wave was particularly severe in North India and not in AP-Telangana

Along with NCR, Telangana and AP – tier -2,3 towns are also a key focus areas for the company wrt new store openings ( areas like Nellore, Guntur, Vizag, Vijaywada etc )

Due to PLIs and greater manufacturing and assembly in India, prices of consumer durables are actually not rising. Therefore, price growth is generally remaining muted for the company. Growth is only coming from volumes

Disc: holding, biased, not SEBI registered, not a buy/sell recommendation