“At the Rs 10 lakh end of the home loan market, we do not see high street banks being as visible and as relevant and at that 10 lakh, we are very keen to participate because I think a lot of the formal job creation is not big ticket, incredibly well paid jobs. These are modest paying jobs, Rs 2-3-4-5 lakh per annum salary jobs and that is where Awas and Home First are very good,” says Saurabh Mukherjea, Founder, Marcellus Investment Managers.
A few months ago you said the insanity is not how the new age tech companies have halved but how they ran up post their listing. Now we are seeing a lot of them being quite cognisant about their overall profitability metrics, short of taking notice of the factors that had alarmed shareholders in the past. Having read into some of the companies’ numbers, the kind of commentary that they are giving, does the view change now or do you believe that the move is not justifiable?
There are two ways to see the whole situation; one is to say that until they get the next round of funding, it will be tough for these new age tech companies whether they are listed or unlisted. The other way to see it the way we would like to see at Marcellus is unless you generate cash, unless you make money, unless you put cash flow on the table, it is very difficult for conservative defensive investors like us to invest in you. Show us the money, show us the cash flow, it does not matter which sector you are in whether you are five years old or 15 years old. Show us that you can generate cash. If you cannot generate cash, I am afraid it is difficult for sensible investors to buy stakes in these companies.
I want to talk about the recent changes that you have made to your Little Champs Portfolio and we have not spoken after that. You have exited . Why? Is this not the longest term consumption play which is currently underway?
La Opala, over the last decade, built the category of ovenware crockery category that did not exist before. Ajit Jhunjhunwala and team deserve enormous credit for building a brand new category. The reason we exited was we are seeing a couple of companies over the last three years now. Over an extended period of time, we are seeing a couple of other companies ramp up the competitive intensity pretty aggressively. It is a small category, unlike pathlabs or paints which are multi-multibillion dollar categories.
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