The first part. I think post IPO salaries have gone up for the top guys quite well, this low salary was pre IPO as per DRHP, maybe there are some technicalities here. You could the check the AR for current salaries.
The second part is visible in the FY23 AR and certainly needs to be checked. The co has taken approval for procurement of around Rs 800 cr from 1 entity and utilised around 700+ last year.
I think this was being referred to.
Not enough history to establish ability of promoters to grow the business from here. Immediate milestones to track is operationalising of JV with Hindustan Antibiotics & the one in Prague.
The article makes some startling revelations:
Nearly everyone on the top management team made less than INR 20 lakhs a year at the time of the IPO, which is weird, given these guys’ work experience/qualifications. Perhaps we have a skewed idea of salaries, but you generally wouldn’t expect a CFO of an INR 600 crs + sales company (at the time of IPO) to make INR 12 lakh a year (the CFO is a wizened CA, which makes it even more surprising).
Quite surprising, given the company does not declare any dividends. Why would a top-management caliber person in electronics manufacturing want to work at such low salaries? I cross-checked this with the AR for FY23 and found that some of these findings are incorrect. As the image below indicates the CFO draws a salary of Rs 46 lakhs.
In FY22, around 25% of the raw materials were sourced from the promoter-owned firm, which promptly increased to 50% in FY23. Of INR 1200 crores in raw material costs, INR 700 crores seems to have been supplied by the promoter-owned firm.
This is correct. As per the FY23 AR around Rs 750 crores worth raw material was sourced from a promoter owned company.
This is a big red flag. Need to dig deeper into this. Usually such kind of things are done so that the majority of the “juice” is squeezed by the unlisted promoter owned entity. No wonder DCX has an OPM of only around 6% for FY24.
Generally when you apply for new drug/facility approval, dates are sought and given in advance. Once facility is approved there are periodic inspections to revalidate past approvals. Some of them are surprise visits.
I am not a big expert in this area, so take this explanation only for a general understanding.
That’s a good coverage by Nuvama about the financial/debt restructuring history of the company. Thanks a lot for sharing @antson_m
Though would like to understand why you think it to be still a very high risk bet?
Sir do you think mapmyindia is going to face any problems in it’s existing or potential business opportunities because of the alleged stealing of its map solutions by ola?
During concall, management informed that the impact would be around 35 crore. They also said their agreement with its customers include a pass through clause. So no major impact for them.
They have guided for EBITDA margins of 9-10% in the medium to long term. How long it will take them to reach there, only time will tell. EBITDA margin has shown improvement in last 2 quarters and as execution picks up from 2Q onwards (as said by management), operating leverage shall kick in and we should see EBITDA margins inching higher.
I think, Any advantage of improved demand will be first sensed by market leader and later it will drops will percolate to sector no. 2 & sector no. 3 slowly. Thats why other are not showing good results. When cake will come to the market, it is sure that its pie will be distributed to all the market players depending upon the size. I have added Avanti , when Eucador issues news comes in market. looking to buy sector no.2 when right moments comes.
True that.
Again, for a retail investor, how do you figure out optimal design? Is it sectors, weight caps, or a blend of styles? If you study even some of the literature, everyone suggests and guides differently. Again then it becomes an hodge-podge. Frankly it is better to tune out the entire noise and build conviction by yourself on what drives you emotionally.
For eg: If I’m a nervous investor, it will not make sense to have high beta names and vice versa.
Another concern about adding Mutual funds is fund managers’ total lack of honesty regarding allocation. A key reason I have only one mf where I do sip. I don’t know why I wrote all this here but just thinking about it.