This fund manager speaks about ancillary businesses like #Zudio and #Blinkit when it comes to stocks like #Trent and #Zomato.
Watch Aniruddha Sarkar in conversation with Niraj Shah: https://bit.ly/49JaNWP
Watch Aniruddha Sarkar in conversation with Niraj Shah: https://bit.ly/49JaNWP
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00:00 There is an optionality value that people are now giving to businesses which were always
00:06 a part of the main business, but were not being given value earlier.
00:11 So for example, when now people talk about trend, they talk about Zudio and the kind
00:15 of growth that Zudio is bringing.
00:17 When they now speak about Zomato, they speak about Blinkit and what Blinkit could become
00:21 in times to come, right.
00:23 Just trying to understand, how do you think about some of these additional business streams
00:29 for any of the portfolio companies that you may be invested in?
00:32 Yeah, I think any of these companies, when we look at these businesses, what we try to
00:37 identify is that if a particular company is suppressed from a price point or a valuation
00:44 point in the market, what are the factors which is leading to the suppression in the
00:47 valuation or the price in a particular company.
00:51 Now since you mentioned in case of Zomato and Blinkit, I think if you look at the way
00:55 the stock reacted post the announcement of acquisition of Blinkit after its listing,
01:01 that is something which got our attention.
01:03 We felt the market was overreacting and that is where we looked beyond the short-term reaction
01:08 and we looked at what can Blinkit do to it in the next four to five years.
01:13 And if it's able to kind of leverage its brand, its network, its on-the-ground reach, can
01:20 it complement its existing food business and also add to the top line and the bottom line.
01:27 So these are things which as an investor, one needs to look at any short-term event
01:31 which is happening in the company.
01:33 Is it an opportunity for the next couple of years?
01:36 And we need to take a point of that.
01:38 Now you also mentioned about trend.
01:39 Now we were bullish on a trend mainly because of the way Zodio was growing.
01:45 And initially there were many people who were apprehensive about Zodio.
01:48 They were saying like, you know, they're having many competition like that in the market.
01:52 You also had your big names who were in a similar price point.
01:56 But what we learned from being an actual visitor to a couple of their outlets is that the whole,
02:02 I would say the comprehensive experience as a consumer which you get when you enter in
02:07 one of their stores is very different.
02:09 The price point at which they're offering top-notch quality is very different and that
02:13 can attract a lot of the mass consumers into their stores.
02:16 And that is exactly what has happened.
02:18 So sometimes on the ground check, visiting the stores also gives you a good feel about
02:23 the businesses in which you're entering into.
02:25 Thank you.
02:30 [music]