Street Smart: Guess the Stock contest-2

Hereunder, we offer you cues about a business that has an interesting story to tell. You can name the stock in the comment section below this article along with your email ID and the one who gives the first right answer wins a branded bag from ETMarkets.com. The results of this content will be declared on October 22, 2018 . The answer to last week’s Guess the Stock contest was Autoline Industries. And the winner was Vivek.

1. This company is a vertically integrated retailer. It sells fashion-related stuff and lifestyle products.

2. The company sources raw material from Hong Kong, Thailand, manufactures the end product in Jaipur and sells it in the US and UK. Because the biggies in the US source it from this company, it can sell the same product at a 60 per cent discount.


3. It is in business for eight years. The biggest player in the US has a revenue of $10 billion. This company’s major expense is broadcasting cost, which is nearly 15 per cent of the revenue. Recently, the same has been coming down.

4. Recently the company has started giving EMI facility, which is affecting its working capital. As much as 35 per cent of the incremental revenue is coming from budget pay, i.e. EMI.

5. It has 3,50,000 unique customers coming on its website or TV channel every year. The company has given guidance for low double-digit growth this financial year.

6. In last two years, the company has been transforming it platform to achieve sustainable growth. Going forward, the company sees a lot of operating leverage coming into the business. A major chunck of its cost is fixed. Hence, incremental sales will start flowing to Ebitda.

7. It has tied up with most of the OTT platforms like Roku, Amazon Fire. It has also stated selling on Amazon. Amazon will always be a threat, but TV shopping has been existing in the US for ages.

8. It reaches 78 million households in the US out of 110, hence there is scope for increasing it there. It has reached around 60 million household in UK, the max it can do.

9. The average selling price for them is $20. The company is focused on a product of volume and price, and not only price. It will sell whatever it can sell the most. Currently, the revenue share of the B2B business is 10 per cent.

10) Over the past 15 years, it has been both a huge wealth creator as well as a massive wealth destructor from its highs. As on date, it market cap is less than Rs 2,500 crore.

- Curated by Arun Mukherjee & Soumya Malini