Dear Sam_Myview, your concern is reasonable, the change in trend will not happen overnight, it may take 10-15 years to get ppl used to this fine dining culture. But that does not mean till then the stk price will remain at 150 only and all at a sudden after 15 years it will touch 2000 rupees. The change in trend will be gradual and so is with the price as well. Without profit they would not have expanded from just 5 restaurants in 2003 to 96 rest in 2012, there is definitely profit in this business and that is why they want to expand more faster and for that they need huge money and thats the reason for the IPO. I have a feeling that if this stk is accumulated in SIP mode then it will not disappoint us and may put us in good profit in next 2 years.
This holding may be part of the IPO. if they were one of the market maker then there is a lock in period before they can liquidate initial holdings. Company have no obligations to explain the change in holdings. Wil suggest wait and watch for few quaters before taking any fresh positions. Now most of their profit is from Mutual fund investment (IPO money) than from operations.
150 is a psychological barrier and it broken twice today. Once it closes below 150 it will rapidly slide, may be 120 level. It is a concept stock may do well in long run if all things fall in place.. but that is a big IF... I do have the guts to make it 10 to 12% of my portfolio :).. Not yet convinced that the organized food chain business will work in a very disorganized/regional centric country.
agree Sam_my view. I just tested the waters with a very small lot at 155, watched it go to 162 and now see it at 150. No complaints so far, but not liking the fact that the MF holding has fallen from 23L shares in June 12 to 16L in Sep and 10L in Dec. Morgan Stanley is a big holder - and I have no clue whether this is a material holding. When I buy i take big punts and go upto 8-10% of my equity allocation. Now wondering whether to add at 150 or wait for it to fall below 150. That could be a psychological barrier and set the wolves on the share....
"Drive Volumes before you can worry about profitability" is been a death trap in Retail industry. Company need to scale/drive volume profitably. Random expansion and multi format will lead to operation chaos and loss of Brand Identity. Once you lose the pricing power you will never get going to get it back.
all companies go through growth pangs. You need to create volumes before you can worry about profitability. Scales have to build up. Not in a hurry to be dismissive let us wait for 3-4 quarters, then the nos. will start looking good. It should be a good buy at 152-55 range - that is almost the issue price...but right now it is shooting in the dark.
Sir, why operating MLC in Gujarat is different thn other locations ? I have been twice to MLC surat in weekend, and to my surprise there were only 10 more patrons besides 5of us. I was there for more thn 2hours, there was no more thn 15/20 patrons at any given time (8 to 10pm) which is shocking, and translates to 85% unoccupied space. I think stock will b better buy around 100 rs