Market Share vs Profit Share in an Industry !

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market Share vs Profit Share MoneyMonk

Yesterday, something strange happened to me when I read this tweet from Prof. Sanjay Bakshi.

As always, my curiosity didn’t let me loose the moment and I expanded the conversation. Just when my mental fuse was gone. The discussion was about apple is having 92% profit share despite having 20% market share. The answer of the quiz was Rajiv Bajaj 😀

I am just a month into this research field and I am able to make out that when we were talking about growth and company’s efficiency to grow, it was always in the context of the sales growth(generally).

No one asked a question, what if a company takes out more profit in the industry even if the sales volume is lower? The reason why I was so surprised is this is such a simple though but I didn’t realise it. But in that moment I twitted the following. 

And Prof. again pulled out something from his knowledge reserve 🙂

What is the point I am trying to make by writing this post?

This moment raised one doubt and one curiosity in my mind.

Doubt? : How many other simple things like this will be which I am unaware of? (So much read!)

Curiosity? : How many other companies will be there in market which are being judged by it’s market share and not by profit share? 

This is the work I have do and time I have to spend.

I am not saying that this is something very intellectual thing and we shall evaluate the company always from this point of view.

But I believe, if you are a true learner of investing then you would be interested in framing your mental checklist to evaluate a business. If so, then I feel this is important. In this support, I am sharing a tweet from Prof., he said this,

I want to thank Prof. Sanjay Bakshi to throw  a light on this and taking out sometime to reply to my tweet.

I might sound naive but I am so happy that he replied and took the pain to share few related quotes and notes to this topic. I have been always learning so much from him and will continue to learn. 🙂

As I often say, may sound naive, “I want my Wisdom to beat my multi-baggers 🙂

Let me know what you think about! Have you come across any other company in Indian market apart from Bajaj Auto?

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One thought on “Market Share vs Profit Share in an Industry !

  1. Beautiful thought!
    I guess, now we need to check profit share as well. This brings an important perspective towards profit margin.

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