- Having an asset-light business in the Winery when your overall moat is limited to Brand, grape quality, Wine Mix etc is not a cool thing to do; especially when grapes are grown in a limited area in India
- Promoter diluting equity and also taking debt, while making a decent CFO and on top of giving dividends, doesn't fit the bill
- Recently, they started giving a lot of discounts and increased the margin for distributors when they started feeling the heat from Fratelli. They have a stronger brand and a huge market size and trend opportunity, but this is a short-sighted strategy. They should focus on growing the category rather than starting a discount war
Think I agree with everything you said. I've struggled to get a lot of promoter comfort, and yes you make a great point on them being asset light. I'm bullish on the space but agree with all the concerns you raised.
My thoughts -
- Having an asset-light business in the Winery when your overall moat is limited to Brand, grape quality, Wine Mix etc is not a cool thing to do; especially when grapes are grown in a limited area in India
- Promoter diluting equity and also taking debt, while making a decent CFO and on top of giving dividends, doesn't fit the bill
- Recently, they started giving a lot of discounts and increased the margin for distributors when they started feeling the heat from Fratelli. They have a stronger brand and a huge market size and trend opportunity, but this is a short-sighted strategy. They should focus on growing the category rather than starting a discount war
Think I agree with everything you said. I've struggled to get a lot of promoter comfort, and yes you make a great point on them being asset light. I'm bullish on the space but agree with all the concerns you raised.