Cantabil Retail India Limited

“Cantabil is a well-run but structurally vulnerable value-fashion retailer earning decent returns today (22% ROE) that are likely to compress over the next 5 years as Zudio/Trent's vastly superior scale and expansion pace erodes Cantabil's Tier 2-4 positioning. At 21x trailing earnings with a narrowing moat and no margin of safety, the stock offers market-matching returns in the bull case and permanent capital erosion in the bear case. Capital is better deployed in businesses with durable competitive advantages or, failing that, at prices that compensate for their absence.”