Operating Margin - RedTape (NSE:REDTAPE)

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Price: 124.06 INR 0.94%

Market Cap: 68.6B INR

12.6%

Current

13%

Average

3.1%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

12.6%

Operating Profit

2.7B

Revenue

21.2B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
IN	R	RedTape NSE:REDTAPE	68.6B INR	13%
ES		Industria de Diseno Textil SA MAD:ITX	175B EUR	20%
US		TJX Companies Inc NYSE:TJX	174.3B USD	11%
JP		Fast Retailing Co Ltd TSE:9983	17.6T JPY	17%
ZA	P	Pepkor Holdings Ltd JSE:PPH	96.4B Zac	12%
US		Ross Stores Inc NASDAQ:ROST	58.8B USD	12%
ZA	M	Mr Price Group Ltd JSE:MRP	44.7B Zac	14%
SE		H & M Hennes & Mauritz AB STO:HM B	295B SEK	7%
ZA	F	Foschini Group Ltd JSE:TFG	27.1B Zac	7%
ZA	T	Truworths International Ltd JSE:TRU	20.5B Zac	14%
US		Burlington Stores Inc NYSE:BURL	17.7B USD	7%

RedTape
Glance View

Market Cap

68.6B INR

Industry

Retail

RedTape, originally a footwear brand, was born in 1996 in India under the aegis of Mirza International. Known for its fashionable and sturdy products, the brand quickly captured the attention of consumers looking for both style and comfort, positioning itself as a go-to choice for men's footwear. Over the years, buoyed by its initial success, RedTape expanded its horizons beyond footwear, diversifying into apparel and accessories. The company's strategy involved leveraging India's manufacturing prowess and its in-house production facilities, enabling it to control the quality and cost of its offerings effectively. This approach allowed RedTape to maintain a competitive edge in the market, ensuring its presence not only on domestic shores but also pushing its footprint overseas, especially in the UK market where premium price points matched the brand’s offerings. The earning mechanism for RedTape hinges on a multi-channel retail strategy that combines both brick-and-mortar outlets and a robust online presence. With exclusive brand outlets scattered across key urban centers, it caters to a diverse clientele, thereby boosting its brand visibility and accessibility. Complementing this physical presence is its e-commerce expansion, which takes advantage of trendy digital marketplaces and its proprietary online platform. By doing so, RedTape taps into the growing trend of online fashion retail, reaching global customers who seek convenience paired with renowned styles. The company's revenue model is wrapped around delivering fashionable, high-quality products at competitive prices, mixing its physical and digital sales strategies to drive growth. High margins from premium products and scale economies from efficient production contribute significantly to its bottom line, while a keen eye on international markets ensures RedTape has steady avenues for expansion.

View REDTAPE Analysis

REDTAPE Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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RedTape
NSE:REDTAPE