Business Models

Why we bought Garware-Wall Ropes?

Posted by | Business Models, Investing Framework, Scuttlebutt, Stocks | No Comments

“Invest in businesses that buy commodities and sell brands” is a powerful idea for long-term investing propagated by Warren Buffet. This lends business the ability to pass on higher raw material cost without loosing unit volumes and retain some benefits in times of softer raw material prices. (a.k.a. pricing power)
As per Prof. Sanjay Bakshi, an attractive hunting ground for mis-priced companies is often where Mr. Market is valuing some businesses as commodity, perhaps because they belong to sectors which are labeled “commodity” for example textiles, whereas in reality some of these might have carved out a niche for themselves enjoying a strong pricing power (think Ambika Cotton)
In 2015 we got lucky when we spotted both these elements to be present in a business called ‘Garware-Wall Ropes’, a Pune based technical textile giant.

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[Video] Talk delivered at FIL Alumni Meet, Pune – July 2016

Posted by | Business Models, Food for thought, Industries, Investing Framework, Stocks | 15 Comments

Recently I had the privilege of sharing my thoughts on investing with my fellow FIL Alumni at Flame University, Pune. The video, along with the presentation, is shared below. I talked about ‘India’s Consolidation Wave'; how the organized players stand a great chance to grow amidst an on-going shift in consumer preferences towards standardised and branded offerings.
Video_India’s Consolidation Wave

Notes on Video (Time 31:11)

00:00 Introduction
01:00 Drivers of Long-term Returns
03:00 Case Studies – Page Industries & Relaxo Footwear
04:30 Defining Unorganised Sector
05:50 Industry Research Filters Applied
06:40 List of Industries with high potential
24:45 Case Study – Decorative Paints (1980 – 2016)
26:48 GST: A big enabler
29:00 Value Migration Vs. Consolidation Wave
30:25 Summary

Presentation_India’s Consolidation Wave

For convenient reading switch to full screen mode

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What makes Wonderla Holidays an amazing business?

Posted by | Business Models, Scuttlebutt, Stocks | 3 Comments

What is the idea of a full-day outing/picnic for an average Indian middle class family? Think about it, what are the entertainment options available for a family even in Metro cities on weekends or when you have some relatives visiting you from outstation?
I bet the first thing that would come to your mind would be- visiting a mall, watching a movie and then having a nice meal at the food court. That sounds good and that is precisely what everybody around seems to be doing. The only issue there could be lack of decent content which you can watch with your family.
Other than that, what else comes to your mind? Think about full-day enterntainment options for an average Indian family. Frankly not many exciting options exist that are

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Tasty Bite Eatables turning Tastier

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We had invested in Tasty Bite Eatables in April 2015 when the stock price was Rs 640. In this post, we will briefly cover what attracted us to the company and how the thesis is playing out. 
Tasty Bite Eatables (TBE) is a company incorporated in 1986 and is mainly into ready-to-eat food. It was promoted by Ghai Family who also used to own franchise of Kwality Ice Cream in Western India. The company went through some interesting times in its brief history; sometimes a great idea fails because it is ahead of its time. Perhaps this was true for Tasty Bite too which questioned its very survival leading it into Board for Industrial & Financial Reconstruction (BIFR). Eventually it got acquired by Hindustan Unilever which withdrew from Indian markets as Indians weren’t ready for ‘ready-to-eat’ food

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Decoding Business Model of Meru Cabs

Posted by | Business Models, Food for thought, Scuttlebutt | 10 Comments

Since a long time, I have been a loyal customer of Meru Cabs whether I am in Dehi, Mumbai or Bangalore. Being a value investor and somebody who strongly practices scuttlebutt, I generally find it hard to resist interacting with the driver. In fact most of these guys turn out to be pretty interesting and knowledgeable. Over these years, I generally found that barring the usual small complaints every employee has, Meru drivers have largely been happy with the company on all crucial parameters like getting consistent bookings, monthly earnings and overall experience.
I was in Mumbai recently when I booked a Meru from Thane to the airport using their android mobile application. (If you haven’t tried the app yet, please have a look. It is amazing as it shows you cabs around you

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