Skip to main content

Posts

RELAXO FOOTWEAR - ECONOMIES OF SCALE

My article on Relaxo  is based on Sanjay Bakshi's thesis on  the company way back in 2008 Relaxo is a low cost player, and its not easy to drive it out of the industry. Infact, it is a disruptor.  By keeping margins low (due to high spent on ad and publicity), Relaxo is likely to keep competitors at bay. And because of its efficiency (as reflected by high turnover ratios), the company can still earn a very respectable ROE. Two things that explain Relaxo’s ability to earn high ROEs on a sustainable basis are brands and low cost advantage arising out of scale. So it enjoys a strong moat. This is not a business that is going to become obsolete anytime. Unlike high technology businesses neither will people go back to being barefoot, nor will the technology involved in this business change. And we love to invest in such businesses because they are so predictable. Relaxo is how it’s moved up the value chain over the years. Many many years ago, the c
Recent posts

Intellect Design Arena - On A High Growth Phase

ORIENTAL CARBON AND CHEMICALS

PSP PROJECTS - FAST AND FURIOUS

SURAT DIAMOND BOURSE- NEXT LEVEL THE PSP CULTURE

VINATI ORGANICS

SUNFLAG IRON & STEEL - STRONG DEMAND OUTLOOK