11x Bankruptcy to Bluechip Stock: A Rare India Revival Story

Apr 16, 2021

Tanushree Banerjee, Co-Head of Research

Never let a good crisis go waste.

I've heard these words more often in the past twelve months than the rest of my life. It's almost a cliche .

But one company I have been researching for years, did just this. Not just amidst Covid-19, in 2020, but even in its early days.

It actually used the worst crisis of its life to become the strongest player in its core business.

It all started in the year 1988 in Gujarat. The company's business was booming. It was in fact able to sell its products at a price double that of competitors.

A successful initial public offering (IPO) gave the company plenty of funds for growth.

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But then came the pressure from investors to diversify into other products.

What followed brought the company to near extinction. The company spread itself too thin and ended up in bankruptcy.

Not one to give up, the company's founder used the crisis to break free from its past. He exited the unrelated products and focussed on innovation for the core product.

So much that the rate of innovation at the company outpaced the rate at which its products were copied by competitors!

Increasing the company's return on capital became the central focus. It moved to an asset-light model.

It shut down its own factory and outsourced manufacturing to third parties. All it owned were the design and intellectual property.

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Over time, the company was not only one of the largest players in its space in India but also supplied to large clients in the US, China, Vietnam, Middle East, and Mexico.

The stock is up 11 times in the past decade.

The government's initiatives to make India a supply chain hub for the post Covid world is an inflection point for the company.

In fact, I believe the PLI (Production-Linked Incentive) scheme would do wonders to the company by ensuring complete self-reliance.

However, this is not the only company set to ride India's supply chain megatrend.

There are a couple of other such companies following a once-in-a-lifetime trend, which I call India's Revival.

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I was live online yesterday at 5 pm at the India's Revival Summit. I spoke in detail about these stocks and much more.

I would like to thank the 2,606 participants who joined me at the India Revival Summit.

In case you missed it, the video of the summit is still available, but you will need to watch it right away before the video is taken down.

Watch my India's Revival Summit here.

Warm regards,

Tanushree Banerjee
Tanushree Banerjee
Editor, StockSelect
Equitymaster Agora Research Private Limited (Research Analyst)

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1 Responses to "11x Bankruptcy to Bluechip Stock: A Rare India Revival Story"

Firdaus Lalkaka

Apr 23, 2021

I'm a new subscriber who enrolled today. How can I watch this ?

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