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Rushil Decor – Management meet notes

We recently met with the management of Rushil Décor Ltd. (RDL) to understand the business better and its future prospects.

While detailed notes are in the attached file Rushil Decor – Mgmt meet notes, hereunder is our takeaway from the meet:

We like the home improvement space. It has all the ingredients to deliver superior returns: hugely scalable business, demographic drivers with the younger population preferring quicker and better-looking products, shift from unorganized to organized quality products, under penetration et al. All this should augur well for the industry. Baring the last couple of years, the home improvement industry was a tough industry to be in, given the fragmentation and competitive intensity that the industry faced. Despite the tough environment, Rushil Décor (and a few others) have managed to create a reasonably strong brand, which should enable these companies benefit immensely from the buoyant demand estimated over the next couple of years. Increased contribution from the MDF business, which should arguably witness lower competition, also augurs well. That said, fairly reasonable valuations (30XFY18a), despite the steep correction in the stock price, is something that could cause some discomfort.

Happy reading.

Cheers!!!

Sudhir

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