Achieve Your Financial Freedom
High Entry Barriers Business
On 30th July 2021, Stock of Alkyl Amines was at its Life Time High of Rs. 4387. Almost 20 months later, company’s stock is now Trading at ~ Rs. 2310 whereas the Operating Profit Margins has Contracted from 35% to ~ 20% and the Net Profit Margins has Shrinked from 24% to ~ 13%, during … Read more
Between April 2005 to March 2014, Ion Exchange Share Price has Increased ONLY ~ 50% in 9 Years. Thereafter from April 2014 to 1st March 2023, Share Price has Jumped ~ 3600% i.e. 36x in < 9 Years. So, what’s the reason behind this Eye-Popping Multibagger Return, during the later 9 years? Consistently Improved OPM … Read more
Both the companies are like Toll Collectors on the Growth of Others, both are Asset Light Compounder Business where OPM & NPM are as high as 84% & 71% for IEX (in TTM) and 62% & 52% for CDSL (in TTM) resp. and simultaneously as the CapEx requirement is very low compared to the CFO, hence EBITDA conversion to Free Cash Flow (FCF) is very high in both these companies. IEX in the Short Term Power Contracts has ~ 90.2% Market Share (as in Q2FY23) whereas, CDSL has ~ 71.5% Market Share with 73 mn BO accounts (as in Q2FY23), Both the companies have multiple Tailwinds for Growth, Both the companies have multiple Optionality in their business given so many inherent adjacencies to enter into, Favourable Govt. Policy and Regulation Environment for both the companies that has Triggered multiple avenues for the sustainable higher growth for the multiple decades, Both are the only listed Dominant Monopoly in their respective business, and in spite of all that has been mentioned here, stocks of both the companies have corrected ~ 55% (in case of IEX) and ~ 35% (in case of CDSL) from their all-time high almost a year back.
In this article, we will know how & why all that has happened and what is the future of IEX and CDSL – 2 High Quality Asset Light Compounder Business.
Both the companies are Fastest Growing in their category; Both Dominate the Market they operate in; Both have either the In-House Manufacturing Facility or the extensive backward integration; both have highly efficient & robust Supply Chain Process & Broader Distribution Network; both have Economies of Scale; both have multiple competitive advantage due Moats & entry barriers to their Business; both have multiple triggers for accelerated growth due to country’s Consumption Driven Economy and Increasing Earning Potential & Purchasing Power of the Aspirational middle class. Keep reading to unfold the Growth Story & Future Prospects of Varun Beverages and Vedant Fashions, 2 High Growth Unique Monopolies.
