Street Smart: Play the Guess the Stock Game-2
By Arun Mukherjee & Soumya Malini
(Kolkata’s Arun Mukherjee, a college dropout by choice, and Soumya Malani, a London School of Economics passout, have come to be known as smallcap aficionados in India’s investor community. They would show up at most AGMs, visit the remotest factories of a company and go chasing end-users to understand their experiences with a product in their passionate hunt for good smallcaps. Soumya and Arun would be sharing their experiences with companies and from the ground in this space every now and then. Keep watching...)
(In this segment, we offer you cues about a business that has an interesting story to tell. You can name the stock along with your email ID in the comment section below this article and the results will be declared on October 22, 2018 . The first right answer wins a branded bag from ETMarkets.com. Answer to last week’s Guess the stock contest is Autoline Industries. And the winner is Vivek.)
1. This company is a vertically integrated retailer. It sells fashion-related stuff and lifestyle products.
2. The company sources raw material from Hong Kong, Thailand, manufactures the end product in Jaipur and sells it in the US and UK. Because the biggies in the US source it from this company, it can sell the same product at a 60 per cent discount.
3. It is in business for eight years. The biggest player in the US has a revenue of $10 billion. This company’s major expense is broadcasting cost, which is nearly 15 per cent of the revenue. Recently, the same has been coming down.
4. Recently the company has started giving EMI facility, which is affecting its working capital. As much as 35 per cent of the incremental revenue is coming from budget pay, i.e. EMI.
5. It has 3,50,000 unique customers coming on its website or TV channel every year. The company has given guidance for low double-digit growth this financial year.
6. In last two years, the company has been transforming it platform to achieve sustainable growth. Going forward, the company sees a lot of operating leverage coming into the business. A major chunck of its cost is fixed. Hence, incremental sales will start flowing to Ebitda.
7. It has tied up with most of the OTT platforms like Roku, Amazon Fire. It has also stated selling on Amazon. Amazon will always be a threat, but TV shopping has been existing in the US for ages.
8. It reaches 78 million households in the US out of 110, hence there is scope for increasing it there. It has reached around 60 million household in UK, the max it can do.
9. The average selling price for them is $20. The company is focused on a product of volume and price, and not only price. It will sell whatever it can sell the most. Currently, the revenue share of the B2B business is 10 per cent.
10) Over the past 15 years, it has been both a huge wealth creator as well as a massive wealth destructor from its highs. As on date, it market cap is less than Rs 2,500 crore.
(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)
(Kolkata’s Arun Mukherjee, a college dropout by choice, and Soumya Malani, a London School of Economics passout, have come to be known as smallcap aficionados in India’s investor community. They would show up at most AGMs, visit the remotest factories of a company and go chasing end-users to understand their experiences with a product in their passionate hunt for good smallcaps. Soumya and Arun would be sharing their experiences with companies and from the ground in this space every now and then. Keep watching...)
(In this segment, we offer you cues about a business that has an interesting story to tell. You can name the stock along with your email ID in the comment section below this article and the results will be declared on October 22, 2018 . The first right answer wins a branded bag from ETMarkets.com. Answer to last week’s Guess the stock contest is Autoline Industries. And the winner is Vivek.)
1. This company is a vertically integrated retailer. It sells fashion-related stuff and lifestyle products.
2. The company sources raw material from Hong Kong, Thailand, manufactures the end product in Jaipur and sells it in the US and UK. Because the biggies in the US source it from this company, it can sell the same product at a 60 per cent discount.
3. It is in business for eight years. The biggest player in the US has a revenue of $10 billion. This company’s major expense is broadcasting cost, which is nearly 15 per cent of the revenue. Recently, the same has been coming down.
4. Recently the company has started giving EMI facility, which is affecting its working capital. As much as 35 per cent of the incremental revenue is coming from budget pay, i.e. EMI.
5. It has 3,50,000 unique customers coming on its website or TV channel every year. The company has given guidance for low double-digit growth this financial year.
6. In last two years, the company has been transforming it platform to achieve sustainable growth. Going forward, the company sees a lot of operating leverage coming into the business. A major chunck of its cost is fixed. Hence, incremental sales will start flowing to Ebitda.
7. It has tied up with most of the OTT platforms like Roku, Amazon Fire. It has also stated selling on Amazon. Amazon will always be a threat, but TV shopping has been existing in the US for ages.
8. It reaches 78 million households in the US out of 110, hence there is scope for increasing it there. It has reached around 60 million household in UK, the max it can do.
9. The average selling price for them is $20. The company is focused on a product of volume and price, and not only price. It will sell whatever it can sell the most. Currently, the revenue share of the B2B business is 10 per cent.
10) Over the past 15 years, it has been both a huge wealth creator as well as a massive wealth destructor from its highs. As on date, it market cap is less than Rs 2,500 crore.
(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)
