All thanks to @Chandragupta for gently nudging into asking difficult questions!
Apart from their core business, their entire communciation is something I would want to see last in any company. On one hand there is slower but more holistic growth that they could have targeted with their MCC and CCS market. There are exciting opportunities in the food industry for which they have communicated in the past and that it will grow faster than other verticals. But looks like they’re getting trapped by the short term or they are looking at some competition headwinds that we fail to realise.
The 1% royalty bit is something which makes the company a no go if they don’t back track and rectify it. Because of a lack of focus, the capital allocation can go for a toss. I wouldn’t want to buy an ethanol business via Sigachi. Nor would I want to buy a generic marketing one (can suck working capital, increase opex and takes a different kind of accumen to succeed). Topline isn’t that hard to increase per se. But will be difficult to do along with better or stable RoCE’s. That’s what their responsibility is but the soft signs are not very good.
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