저자: 미상 · 외국인
요약 보기
Rakesh Jhunjhunwala의 철학을 소개: 사업은 현금흐름 기반이어야 하며 지분 희석은 부의 창출을 해친다. 이커머스식 현금흐름 없는 성장 모델에 회의적이며, 자본 배분 실패가 부를 가장 많이 파괴한다고 주장. Raymond와 Arvind Mills 사례로 과잉 투자가 시장에서 처벌받는다는 점을 강조. 개별 자산에 대한 가격 방향 예측은 없음.
다듬은 글
Rakesh Bhaiya always taught us that Prashant business is built on cash flow and he always gave us the example of Titan that you want to leverage the cash you are generating and grow with that because if I am a shareholder and a bigger shareholder than me is a promoter and ultimately I have set out on my wealth creation journey then the less dilution there is in it the better it is.
Every time you are doing equity race then friend why should I take your share next time because after six months you are going to come and give it to me so where there is constant dilution in any company there cannot be wealth creation so if you look at his entire thesis and his entire wealth creation journey you will not see a business of e-commerce and thinking was his belief and one very important thing is that it is not his behavior but his belief was that it is built on cash flow so if by mistake he took such a business that he would incur loss for the next seven years and then he would make profit and then the entry would also be I did not get it, no brother, and he also used to say that this is not always right, in fact, Buffett also did the same, so when Buffett got the news of dot com, then someone in Buffett's Uma's shelter said why are you not doing it, I said I do not do any cash flow business, so I am your share holder, don't you think it is your responsibility to learn, if you do not know how to learn, then luckily Rakesh Bhaiya does not manage anyone's money, he had his own money, but one school of thought was that brother, businesses are made from cash flow, the second school of thought was that it is not necessary that businesses are made from cash flow, it is necessary that I scale a business, value gets scale, then I take it to scale, then I will get value, but to reach that scale, according to the nature of the business, like today you talk about Zomato or our investment of Everstone in pharmacy, if you look at the structural, then the old school of businesses used to invest in plant machinery, the new school calls me the balance sheet You are investing here and I am investing in brand building and customer acquisition.
So what is the difference? I could also have capital. My balance sheet looks big, but the accounting standard of the Chartered Accountant Society is that if I spend on marketing, it will go through PNL, so you are seeing a loss. Ultimately, I will also try to build a business. Both are schools of thought.
Which one is right or wrong, but we did a big exercise when I came with Bhaiya, Research Head Rakesh Sir. With Rakesh Bhaiya, we did a lot of research on which businesses have destroyed most wealth and when we double-clicked on it, we understood that most wealth is destroyed because of capital misallocation.
If you do not respect capital, then ultimately the stock market will punish you. A very interesting example is that Bhaiya used to tell us about Raymond. I don't think there is a bigger or more powerful brand than Raymond. Right, we all have grown up with The Raymond. Man, what's more, even today, suiting and suits are still a business with a gross margin of 50-60%.
I do n't know what to do with that money. This was a brand. At that time, a new company came and Sanjay Lal Bhai started Arvind Mills. Arvind Mill took a different point of view: I make denim, but I will be the denim supplier to the world, whether you are Levis, Gap, or whoever you are, I will supply you.
So, he opened a big plant and started expanding, started bringing denim prices to a huge level. The stock market liked this story very much, so they gave Sanjay Lal Bhai's company a market cap higher than Raymond. Friend, there will be pain somewhere, right? Entrepreneurs, so I will make Raymond a business with a return on capital employed of 70-80.
He took out all the capital that was coming in through cash flow and invested it in denim. The market said, what stupidity is this, he got such a punishment. Now, in the last one and a half years, Raymond has come back to recognition. Capital allocation becomes a very important decision for wealth creation.
The only difference is when you are building a business through cash flow. Capital will never be misallocated because you have so much cash flow. If you want to see more such insightful shots and clips, then subscribe to this channel.
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