Asian Granito

How we caught & dropped a 5-bagger – Story of AGL

Posted by | Investing Framework, Scuttlebutt, Stocks | 3 Comments

Ceramic Tiles is one space which we have been tracking for many years now. In the past, we have misjudged the potential of branded players and missed some multi-baggers like Kajaria Ceramics and Somany. (blog post from 2013) During 2015, we studied a company called ‘Asian Granito’. With Rs 850 Cr. in annual sales AGL is the 4th largest in India’s Rs 24,000 Cr. ceramic tile industry. It was available at Rs 160 a share and a market cap of Rs 360 Cr. i.e. 0.45 times sales vs. 2-3x for Kajaria and Somany. Despite throwaway valuations, we gave it a pass owing to some concerns on the business and management quality. We again looked at it when we learned Mr. Tapan Jena, a professional with 27+ years of experience in …

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