I do agree that the management of Rayban Sun Optics has not been agressive enough in India.Parent Luxottica has been focussing its energy on China by buying retailers and also having some manufacturing there.Sooner than later they will turn their focus to India as well.That is certain,the reason being that though as you say the pie is small , Luxottica would like to keep for itself a large chunk of the rapidly expanding pie.(there is heavy competition in the large pies)
Recenly,Rayban Sun MD Harsh Chopra stated at a conference ,"The category is growing rapidly with designer brands.What we need to understand is how to deal with obstacles to growth like the supplychain ,fakes,VAT,and high import duty of 33 percent as transfer price."The problem of fakes and substandard stuff is really negative but my argument is that things can only improve and customers(with increasingly higher disposable income) nowadays want quality and they know where to get it (with the spread of internet and blogging ,this trend will strengthen) -at Lifestyle,Shoppers Stop,Lawrence and Mayo,Himalaya Opticals,Gangar Opticians etc etc.
As you say the crucial question is whether the management is going to get agressive.Also when and how Luxottica will get into the retailing sector with the Sunglass Hut chain or will they buy out chains as they are doing in China?
Since these designer sunglasses have value in the' MADE IN ITALY' tag
and Rayban Sun can just market these, Luxottica may be satisfied with the present equity stucture though I think they have agreed to make the open offer if directed by the court to do so.At the time of the controversy India was not an attractive market and Luxottica was also not as financially sound as it is today.
Considering all factors I think financial ratios will improve and stock price will rise.
Please comment on any new information I may have given and your judgement.
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