Rossell India Ltd

I feel there is lot of misjudgement in your analysis so I take the liberty to clarify. Intention is to just put facts and thoughts out there.

Firstly, Techsys is a highly skilled labour intensive process so therefore no addition to plant & machinery. You are right about margins, they are sub 15% as of now.

Inventory days are high due to the time taken in readying the wire harness, which in the agm transcript, Rishab Gupta has in clear words said that inventory days going to come down to 3months. Excerpt of speech quoted below:
“I would just like to add one point that sorry on the question was raised on inventory levels as of today. Rossell inventory levels are close to 6 months. It was a strategic decision taken, but overtime definitely the idea is to come down to 3 months now. “

On the 2000 cr order, they can deliver 500 cr/quarter and use the sale proceeds to fund the RM for the next quarters orders, so i really doubt they need to borrow more than 2-300 crs.

I agree that Harsh Mohan Gupta’s comment on Billions is rather uncalled for, but he is not luring investors by that as the promoters own 75% of the company so they arent interested in stock price, but are here for the growth of the company.

I agree mgmt could have answered point wise to each question raised, but they are always tight lipped. More can be learnt from Rishab Gupta’s detailed interview in Asia One magazine.

The way i have understood this company is,

1. that are par excellence at what they do and have earned extremely sticky customers so very high entry barrier
2. Apart from Defense, Wire harness opportunities in commercial aircrafts is a huge and company is well placed to benefit
3. As of now wire harness but the plan is to get into higher value add businesses. They are tight lipped about this, but that is the plan. first acquire sticky customers, then grow your product portfolio.
   From tea when they can venture into defense, why would they not plan to grow into high value add in defense.

Disc: Invested since a year.