Rajesh Singla, CEO & Co-Founder, Planify
New Delhi (India), February 21: Once a day devoted solely to romantic relationships, Valentine’s Day has evolved into an economic juggernaut with significant implications nowadays. Its global expenditure exceeded $14.2 billion in 2023, indicating its remarkable financial clout that persists today. However, beyond the customary exchange of tokens and expressions of love lies a new trend shaping up – Valentine’s Day Investments. This shift mirrors changes in consumer behavior and unlocks distinctive opportunities for investors eager to leverage the sentimental warmth present within this market segment.
From love to finance: The transformation of Valentine’s Day
Historically, Valentine’s Day was linked to expressions of romantic love with the exchange of gifts such as flowers, chocolates, and intimate cards. However, in present-day society, this occasion has expanded its horizons to include a diverse range of emotions like self-love along with non-romantic attachments including friendships and family ties. This shift in perspective has created an abundance of products and services accordingly designed for different relationships granting newfound investment prospects.
Why Stocks on Valentine’s Day?
Investing in stocks is an empowering way to take charge of your financial future. Unlike traditional gifts that lose their luster over time, investing in stocks is about planting a seed that has the potential to grow exponentially. This is particularly significant for couples in India, where planning for financial milestones like children’s education and upbringing is a top priority.
For those new to the stock market, the idea is straightforward: When you buy stocks, you’re buying a share in a company. If the company does well, the value of your stock can increase. Over time, this can result in substantial financial growth, far outstripping the returns of traditional saving methods.
Getting Started with Stock Investments
The journey to investing in stocks begins with education and research. It’s crucial to understand market dynamics and identify companies with strong growth potential. Many Indian couples might be wary of the stock market’s complexities, but with a bit of learning and perhaps some guidance from financial advisors, it can become an exciting and rewarding venture.
For tech enthusiasts who appreciate both innovation and affection, consider gifting them an investment opportunity in Proxgy – a Deeptech AI Startup. For those who prioritize experiences over material goods, Proxgy is a one-of-a-kind service that provides virtual access to locations or events. Given the surge in popularity of virtual reality encounters, investing in Proxgy could prove particularly advantageous. Their IIoT hardware, think smart safety helmets, and sensor-equipped wearables, bridge the gap between physical and digital realms.
Shark Tank India Triumph: Presented by co-founders Pulkit Ahuja and Inderjit Singh Makkar, the company was featured in Season 1 of Shark Tank and secured funding from 2 prominent Sharks. Imagine the return of investors who have invested in Proxy during its initial phase when the company was valued at ₹10 Crs. in Shark Tank season 1. Currently, the company is valued at more than 200 among the investor community. Proxgy has recently raised funds from notable investors like Planify Capital, Piyush Bansal, Suhail Sameer, Anchal Mittal, etc.
Urban Tots: The Story of Growth
Valentine’s Day shoppers looking to express their love for children might find Urban Tots an enticing investment opportunity. With a wide range of toys geared towards kids, this business is well-positioned to excel in the youth-oriented gift-giving market. Urban Tots is in Role Play toys and heavy toys such as making cars and motorbikes for Kids and is poised to become India’s biggest Toy manufacturing company in 2024. The company is planning for its IPO in 2 years on the mainboard.
Revenue Growth: Urban Tots has achieved a remarkable growth of 203% growth in revenue, i.e. from ₹ 16.23 Cr in FY22 to ₹ 49.2 Cr in FY23, and achieved profitability of on account of strong book value, the new acquisition of customers and expansion of the product base.
The company’s profitability has grown by 73% from ₹ 2.42 Cr in FY22 to ₹ 4.18 in FY23. The Return Ratios of the company stands at a rate of 23% in FY23 and the ROCE of the company stands at a rate of 16.7% in FY23. Their ability to optimize inventory turnover contributes significantly to their operating efficiency. Cost of goods sold accounts for 55% of product sales, indicating prudent cost management. Urban Tots’ financial performance underscores its potential as an investment opportunity.
Returns: The strategic expansion is forecasted to drive overall revenue growth, with expectations reaching between ₹1,000 Cr. to ₹1,200 Cr., accompanied by a PAT estimated between ₹200 Cr and ₹250 Cr by FY29. Considering a conservative approach, the company anticipates achieving a profitable position ranging between ₹200 Cr – ₹250 Cr in FY29. This forecast would result in a valuation of ₹10,000 Cr with a forward PE ratio of 50x, positioning a substantial 18x growth in valuation, indicating a notable growth trajectory for the company within the next 5 years. hence, if an investor plans to invest ₹1 cr at the current valuation, the investor can expect a process of min. ₹10 cr in 5 years.
The Fundamentals of VCI Chemical Industries
Another perfect Valentine’s Day Investment is VCI Chemical Industries. The chemical business is all booming, and in the last 10 years, none of the specialty chemical companies has ever made a profit. Who wants to avoid investing in the next multi-bagger stock, the upcoming chemical star whose 87% of the top line is already booked.
Strong Fundamentals: VCI Chemical produces chemical products including Coal Tar Pitch (CTP) and high-quality Distillates. These play crucial roles in various industrial applications, from construction to manufacturing. The company aims to substitute 20%-25% of the CTP requirement in the Middle Eastern market which currently relies 100% on Chinese imports.
Returns: The industry P/E stands at 40x as of date. Even at a conservative estimate of a P/E of 20x, the company is expected to achieve ₹1,000 Cr. valuation in 5 years which is 10x the present valuation thus signifying per year return to be close to 78%. In case if an investor invests ₹ 1cr at the current valuation, and expects to earn ₹ 10cr. in 5 years.
A Lasting Legacy of Love
Investing in stocks this Valentine’s Day is more than a financial decision, it’s a symbol of your commitment and shared dreams. The funds grown from these investments can be pivotal in supporting significant life events, from your children’s education to major family milestones.
In essence, this trend of Valentine’s Day investments is an eye-opener for couples across India. It’s a call to think long-term and recognize the potential of investments not just as a monetary gain, but as an enduring testament to your relationship. This Valentine’s Day, consider embarking on this investment journey, a decision that promises to enrich your many Valentine’s Days to come with more than just love, but a legacy of financial security and shared success.
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