Market Share vs Profit Share in an Industry !

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?

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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