Believe in the power of compounding..

 

In all the inconceivable stories we hear of multibaggers in stock markets, stories of wealth creation and stories of the power of compounding; Page Industries is one such elite example; a stock which has given phenomenal returns to shareholders. It vindicates that all it takes is one right investment to change your life.

Page India is a licensee of Jockey International and Speedo in India as well as Srilanka, founded in 1995. Listed in July 2007 at a price of Rs. 600; the stock has given phenomenal returns over the last 10 years.  It was founded by the Genomal family and is currently managed by Pradeep Jaipuria as CEO and the Genomal family.

Through the recession of 2008, the stock was trading between Rs 300-500. Let’s assume an investor bought 100 shares of Page industries at Rs. 400 in 2007-08.

Investment value in 2008: Rs. 40,000

Current value of investment: Rs. 16,13,400

Gains (tax free) : Rs. 15,73,400

Dividend income: Rs. 20500

Gains: 3933%

The stock traded at a lifetime low of Rs 282.10 on March 16, 2007. From its lifetime low, the company has given returns as high as 5621% in a span of less than 10 years !

These phenomenal gains would be the result of purely sticking with a fundamentally strong, growing business with an adaptive and compelling business model. Page’s revenues have grown at a compounded annual growth rate of 35 per cent in FY10-15.

This leads to the conclusion that sticking through your investments, picking a strong fundamentally sound company, trusted management even in the worst economic recessions where stock markets and economies are collapsing can generate enormous wealth for investors. It’s just about recognizing the stock and sticking with it through recessions and downfalls.

 

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