Hitesh,

Just want to appreciate that I have rarely seen such concise and apt analysis.

Keep it up. :)

Originally posted by manish_okhade Well jokes aside, Can you pl elaborate how come a Chaddi player grow the MCAP to such a high level? Any fundamental analysis will help.

What one needs to know is Page is no more a chaddi player. It is into socks, track pants, boxer shorts, bandis, women's inner wear, kids inner wear, Speedo range of products etc.

Out of the total indian population of 120 odd crores, if one were to assume that only 5 % people are the potential addressable market for Page, then with all the above products, Page can garner minimum 500 (2 chaddis plus maybe a pair of socks or two pair of ganji) Rs per year sales from the above people then it has sales potential of around 3000 crores. I read somewhere that the whole underwear market potential for India is around 18-20k crores. And this market keeps growing at around 12-15% per year. Plus Page has the brand power and distribution network firmly in place.

Currently page is around 3000 cr market cap on turnover of around 600 crores. So on turnover of 3000 crores it can go up to around 15000 crores. And the brand pull is so good that they can keep on extending the brands plus launch new categories which they feel comfortable catering to.

All in all this can be a good compounding machine for those who want to buy and sleep and forget for next 3-5 yrs. It can easily give around 20% cagr returns on a conservative basis. If one is smart and gets in during a weak quarter or during some problem the company faces of a temporary nature, remember Hawkins then returns can be higher.

Regarding threats of Reliance or other bigger players, just look at the attempt of Reliance to enter the retail space looking at the success of Pantaloon and they seem to have landed themselves in quicksand. One cant make a brand overnight in the undie space. Thats where page has the edge.

Originally posted by manish_okhade Hitesh,At what PE you biught?

My avg price is around 2470 per share. For eps of around 95 per share for fy 12 it is close to 26-27 times PE. But it does not occupy a very high portion of my portfolio. Valuation wise it is not cheap at all but thats the problem with page, it will continue to move sideways till the earnings catch up with price and then it will spike up.

Currently I think my choices would be to buy stocks which are going to bounce back strongly after the drubbing they have gotten. Still evaluating my choices in that field though. Took some trading bets in mid cap it sector last week. Metals, banks and infra could be next in line but I think most of the stocks have had a very sharp recent run up and so there is bound to be some cool off.