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Discuss Cravatex

with 19 comments

Thanks to everyone for your inputs. I will try to summarise here.

First off, following business are run by Batra Group, which of them add upto financial statements of Cravatex ?

1. Proline Fitness ( – Part of Cravatex Ltd

2. Proline Apparels ( Clearly mentioned here, it is joint venture between Bombay  Dyeing and Batra Group  Also clearly mentioned here  

( Confirmed that merchandise is for Proline India Ltd and not Cravatex Ltd)

3. Fitness equipment and other sporting goods from Nissau, Dunlop, Johnson Tech ( Part of Cravatex Ltd)

4. FILA shoes (Part of Cravatex Ltd as per

5. Running of Gyms in SBI, Microsoft, Land T,  Hotels, Schools, Housing societies etc ( Part of Cravatex Ltd)

6. FILA Apparels and FILA franchise showrooms (Part of Cravatex Ltd)

Please let me know if I have captured the details correctly ?

Later, we can analyse each business segment, its model etc.

Written by amitdipsite

November 14, 2010 at 4:51 am

Posted in Uncategorized

19 Responses

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  1. you have categorized the business very well. i am hesitating to invest init due potential conflict of interests between proline india and cravatex. FILA brand is used by both proline and cravatex so it is not clear how much benefit cravatex will have from FILA's growth plan in india.

    Bhola Meena

    November 14, 2010 at 5:26 am

  2. Hey Bhola,

    Sure, final decision will be yours….

    Globus Spirits, Relaxo also have 3-4 businesses in private in shoes and spirits which are not listed.

    Sometimes they turn out to be economies of scale, and sometimes conflict of interest..



    November 14, 2010 at 5:28 am

  3. Let me share with all of you my experience today I had in a small mall here in Wellington, NZ.

    My wife and I went to a shop at this mall, we go there sometimes to look for deals which are sometimes a steal. This shop sells very high end brands and I talk to the shopkeeper at times to get feedback. I used to think that North Face was the top end, she corrected me last year and I was told the correct order in terms of premium-ness. #1 for womens wind cheeters/jackets is Wild Rose, #2 is Marmot #3 is Helly Hansen #4 is North Face.

    This year again they are happier with North Face than Wild Rose because more stuff is coming back from Wild Rose customers.

    Another myth she corrected me in was, “Made in China is not always bad”. They sell shoes here from SEEK, UGG, TEVA, Marmot etc these companies makes much better shoes than Nike, Reebok, Adidas etc in same price range. Much more aesthetic looking. So, back to shoes business, UGG shoes Made in China are far superior to those Made in NZ, and Made in Australia in terms of workmanship ! Amazing lesson for today.

    This shop sells everything in from socks, jackets, innter wear, floater, shoes. So, its a plus to go to this place with all categories than only a shoe shop.

    Why I gave this example is, incase Proline T Shirts are not going to Cravatex's financial statements and Proline's equipment is, its fine. Many sports shop have all goods from different companies.

    Anyhow, for me its important to know now, whether FILA apparels will be in Cravatex's financial statements or not.



    November 14, 2010 at 5:41 am

  4. From my brother:
    Today we guys went to InOrbit mall..

    It has become more than clear to me (after looking at the price tag) that for each merchandise, there is a manufacturer and marketer. The guy who markets owns the brand and manufacturer may or may not be the same. For example, Levi's jeans is manufactured by following guys but in each case marketing is done by : Levi's itself.
    Levi's is manufactured by Everblue apparels, Prateek apparels, Unitex apparels to name a few but the brand is of course owned and mkted by Levi's itself. I checked for several brands like adidas, puma, reebook etc etc and in each case marketer was the company itself.

    Coming to the cravatex-proline-fila saga, I went to Proline store and had a look at their stuff. All Proline merchandise was marketed (and manufactured) by Proline India Ltd. The store also had: File shoes, fila socks, fila wrist bands (worn esp. by tennis players) and also a lone Fila sports bag. Each of these was manufactured by different companies but marketed by Cravatex Ltd.
    This is what I mean:
    Fila shoes: Cravatex
    Fila socks: Cravatex
    Fila wrist bands: Cravatex
    File bag: Cravatex
    I am willing to wager now that Fila [WHATEVER] is owned by Cravatex Ltd. in India. The store did not have any other apparels like tshirts, shorts etc from Fila.

    I also went to Proline Fitness. Unfortunately, the store manager had just left but I still had a chat with one of the clerks at the shop.
    – He was of course aware that Proline Fitness is owned by Cravatex. I further learnt that this is company owned store and not a franchisee.
    – Proline Fitness has 3 stores in Hyderabad: At InOrbit mall, in secunderabad and somajiguda.
    – The store at Somajiguda has beeen around for 15 years.
    – The store also had some equipment like hand-presser and some other stuff, obviously manufactured by Cravatex.
    – Most of the sale happens over the weekend and as far this guy knew, the store was doing well\ok.
    – The store is right now towards one end of the floor and sometimes is overlooked but a KFC is opening to its left and that will be a big boost.
    Will go and meet the store manager on wednesday.


    November 14, 2010 at 8:44 pm

  5. If you read this Thread, Saroj is the person who brought this our attention, I was the person who rejected it due to lack of understanding organisational structure:

    I am for Cravatex as of today more than against, but in no way should it change your decision. Its a typical Mohnish Pabrai investment, “Heads I Dont Lose Much, Tails I Win”.

    Liquidity – My two cents. Lets remember this one carefully for all times to come.

    It is considered a big negative for some but a positive for others.

    True, if you try to buy or sell 2000 shares, you may not be able to buy or sell. Those who follow this line of thinking are traders and can't be more wrong.

    Never consider liquidity in purchase decisions as an investor, never.

    Hero Honda was highly illiquid and a 100+ Bagger, Crisil (RJ's pick) was and even till date is very illiquid and 200+ bagger over last decade. Infact all the stock I love are illiquid eg. TTK Prestige, Relaxo, Cravatex, ICRA, Photoquip, Gujarat Reclaim and Rubber Products, etc.

    Highly liquid counters of late 90s like Silverline, Himachal Futuristic and many more … are bust, God Bless those who buy based on liquidity.

    One does get influenced by others opinion, and the tone changes depending on bias whether you are long or short on a script, therefore please think independently over the next few months and decide accordingly.


    November 15, 2010 at 1:21 am

  6. More on Liquidity !

    1988 Warren Buffet annual letter


    In two respects our goals probably differ somewhat from those of most listed companies. First, we do not want to maximize the price at which Berkshire shares trade. We wish instead for them to trade in a narrow range centered at intrinsic business value (which we hope increases at a reasonable – or,
    better yet, unreasonable – rate). Charlie and I are bothered as much by significant overvaluation as significant undervaluation.

    Both extremes will inevitably produce results for many
    shareholders that will differ sharply from Berkshire’s business results. If our stock price instead consistently mirrors business value, each of our shareholders will receive an investment result that roughly parallels the business results of
    Berkshire during his holding period.

    Second, we wish for very little trading activity. If we ran a private business with a few passive partners, we would be disappointed if those partners, and their replacements, frequently wanted to leave the partnership. Running a public
    company, we feel the same way.

    Our goal is to attract long-term owners who, at the time of purchase, have no timetable or price target for sale but plan instead to stay with us indefinitely. We don’t understand the CEO who wants lots of stock activity, for that can be achieved
    only if many of his owners are constantly exiting. At what other organization – school, club, church, etc. – do leaders cheer when
    members leave? (However, if there were a broker whose livelihood depended upon the membership turnover in such organizations, you could be sure that there would be at least one proponent of
    activity, as in: “There hasn’t been much going on in Christianity for a while; maybe we should switch to Buddhism next week.“)

    Of course, some Berkshire owners will need or want to sell from time to time, and we wish for good replacements who will pay them a fair price. Therefore we try, through our policies,
    performance, and communications, to attract new shareholders who understand our operations, share our time horizons, and measure us as we measure ourselves. If we can continue to attract this
    sort of shareholder – and, just as important, can continue to be uninteresting to those with short-term or unrealistic expectations – Berkshire shares should consistently sell at prices reasonably related to business value.


    November 15, 2010 at 1:30 am

  7. Cravatex CS was very defensive and could not get much information from him will need to get in touch with a director.

    But importantly, FILA accessories and apparels that are going to be introduced in India through franchise shops will be part of Cravatex Ltd. Their shops and showrooms are separate as can be seen in “Locate a store” of and, they have different stores in cities, only few are common. Check out their stores in Delhi for example.

    The only business that is NOT part of Cravatex Ltd is Proline Apparels, which are by Proline India Ltd.

    For any more answers one would have to speak with Directors.



    November 15, 2010 at 5:12 am

  8. Cravatex touches 500. Sigh. Getting out of hand.


    November 15, 2010 at 10:59 am

  9. Dear Amit,
    With lots of information shared and discussed I became more confused.
    Lets restart, in one post we discussed it is and going to be a Multibagger however here thoughts came like “I am for Cravatex as of today more than against”.
    So are you more comfortable with PhotoQuip?
    I also dropped lots of queries to both companies will share once get the response.
    I think if they have FILA exclusive rights thats itself is more then req, provided they are not diversifying unnecessary.

    What do you say?
    So whats up?


    Rahul Kumar Paliwal

    November 15, 2010 at 6:24 pm

  10. Dear Rahul,

    Please also send a reminder query to them, with subject line like STILL WAITING FOR REPLY in email. Also buy 1 share atleast for both of them, and send your DPID and and DEMAT account number in the information too.

    If you get no reply, best to ring up after 7-8 days.

    When I said, “I am for Cravatex as of today more than against”, it was only in response to the context established by MG, Bhola, Prashant et al and also I do not want to influence everyone's mind. It was to reply that despite skepticism I am for Cravatex. I have read from other impression that somehow Photoquip seems no-brainer.

    I continue to maintain my position that Cravatex will be a multibagger (if they don't dilute shares), too early to make a call without knowing dilution and how expansion works, but I won't hesitate to stick my neck out and affirm a 5 digit price tag on it by 31st December 2015. Reserve the right to be wrong.

    Personally I have Photoquip in much more weightage that Cravatex, I added couple hundred yesterday in my own account with new money.

    Kind regards


    November 15, 2010 at 6:52 pm

  11. Dear Amit,
    You seems to be online by 24×7 :-).
    Yes, I know they will not entertain anybody so mailed them with demat act number.
    Will drop a reminder mail tomorrow, infect would call them.
    I agree on no-brainer about Photoquip. And at the same time I am sure if madness starts with retails story, FILA India Representative can get nice valuation.
    So lets gather view of the people who are running this business.


    Rahul Kumar Paliwal

    November 15, 2010 at 7:06 pm

  12. Hey Rahul :),

    Its 8 am here, what are you doing at 1 am in the morning ? No sleep ?

    Products are not very tech intensive in case of FILA, lets see how the new products work out in market, afterall its all about selling shoes and apparels… their hirings seem up, employee costs up.



    November 15, 2010 at 7:13 pm

  13. Going, man..good night…bye. thanks for recalling about time, with your thoughts, it inspire to research hard.


    Rahul Kumar Paliwal

    November 15, 2010 at 7:19 pm

  14. Thanks for your research on cravatex. It is clear now that cravatex will benefit from FILA sales and there is no conflict of interest between Proline India & Cravatex.
    I am already deep invested in Photoquip. will start building position on Cravatex now.

    Bhola Meena

    November 16, 2010 at 3:32 am

  15. Man u n ur bro are kinda real investors. Appreciate both of u esp for ur brother's spirit to visit the shop personally. Keep it up! There r lot of things common btw us, I shall mail u 😉


    November 19, 2010 at 12:39 pm

  16. Amit,

    Stock seems to be really illiquid.. Would you recommend a buy @ 700 levels??.. it seems i need to buy at this level to get fair quantity..


    December 29, 2010 at 4:39 pm

  17. Purchase and sell decisions need to be based on your conviction as you will be suffering a loss not myself for wrong decision.


    Ideas expressed are only opinions in my personal capacity as individual. It does not constitute a recommendation to buy or sell.

    -I am invested all said and done.


    December 29, 2010 at 11:05 pm

  18. Hi mate

    you have mentioned in equitydesk that cravatex owns a property worth 30 crore in mumbai. where do get this piece of info?


    March 14, 2011 at 7:09 am

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