Relaxo Footwears
Relaxo Footwears is a company run on solid corporate governance principles with no instance of wrongdoing. The management has been able to focus fully on the business instead of firefighting and wasting time on distractions. The income statement, balance sheet and cash flows are so clean that they seem to be performing a symphony orchestra. The company's chartered accountants should ideally charge less since they would have to spend so little time auditing the financials of the company.
Relaxo sells at a PE of 96.55
Data extracted from BSE
There would be lot of things that would go into determining the PE- the strength of the business model, growth ahead etc. But most importantly, good companies get rated higher due to the TRUST the shareholders have on the financials - they know 'what they see is what they get'. There is no jhol (mischief) in the financials.
I hope that current and prospective entrepreneurs realize that there is so much money to be made if you take the high road. Even if we keep discussion on morals aside, it makes immense economic sense to keep the books clean because the high road is paved with gold.
(This is not an investment recommendation to buy or sell the company mentioned in the post)
