Tag: Consumer Goods

Relaxo Footwear

Most of us must be aware of the Relaxo brand. The interesting part is the evolution of the company from the traditional “Hawai Chappal” business to the fashionable shoes, sandals and slippers business under the brand “Sparx” & “Flite”. It’s a definite consumer play story and the company has done remarkably well over the last 5 years.

During the last 5 years the turnover has increased from 200 Cr in 2006 to 557 Cr in 2010 while Net Profits have shot up 10 times from 3.27 Cr in 2006 to 37.70 Cr in 2010.

To get a better understanding of the company, we visited the company and met the CFO – Mr. Sushil Batra. Key takeaways from the interview are:

  • The growth since 2006 is real and the reason is the initiatives taken by the management to venture into manufacturing of Flite slippers and subsequently Sparx. Both the products have witnessed a very good demand from consumers and hence there is a brand pull. Continue reading Relaxo Footwear

Manjushree Technopack (MT)

Top 10 Brand Values
Top 10 Brand Values

This was the article in “Economic Times” which specially attracted Dad. At number one, in respect of brand value, it was none other than Coca-Cola, and on a bit of research, it was revealed that Manjushree Technopack (MT) was providing bottling services to them. Yeah, it became an instant favorite 😀 .

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MT is a packaging solutions provider with an experience of two and a half decades in providing its customers with cutting edge plastic packaging solutions.

Few positives:

  • MT has been growing at CAGR of almost 25% for last 5 years. This growth rate is expected to continue for next few years based on the aggressive expansions the company has been undertaking. The company has been tying up with the top MNCs
  • MT has an impressive client profile : Cadbury, Nestle, Coca Cola, P&G, Bisleri etc
  • MT has been able to maintain very good operating margins and able to expand the same with increase in turnover. The other good things are its strong balance sheet – reasonable debt equity ratio, control over debtors and inventory to get strong cash flow.
  • As per the recent announcements, the company has tied up with Coca Cola & Bisleri and is putting up exclusive capacities to cater to their requirements. As per the arrangement, the offtake will increase 50% every year.
  • MT is also targeting to cater to the liquor industry and has tied up with likes of UB Group, Radio etc.

Attractive Valuations:

  • At CMP of Rs. 32.50, the stock is available less than 5 PE.
  • It is trading at a discount to its BV of 44 by almost 25%.
  • Co is a regular dividend paying company & had paid 10% dividend last year.

Expectations:

  • We expect MT to continue to grow @ 20-25% for next 2-3 years.
  • For FY 2010, MT may be able to deliver 130-140 Cr turnover resulting into a NP of 8-10 Cr. Hence an EPS of 6-7.5

Snapshot of past financials:

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