Invetory does appear to be in the company’s books. Perhaps they meant liability is funded by OEMs - this may have been the case in the past, say in FY20 where 184 Cr inventory is balanced by 184 Cr Payables. However, FY22 inventory seems to have been partly funded by the company, since the borrowings have gone up from 34 Cr to 115 Cr or so (Mostly short-term borrowings for inventory)
Strange thing about this debt though is that it doesn’t add up with the interest they are paying which is around 16 Cr.
That’s almost 14% interest which is abnormally high for short-term working capital finance. Even FY20 interest is 14 Cr, on a debt of just 34 Cr, which makes me question if the inventory is being financed by the company with ST debt.
Also, the CFO doesn’t reflect the return ratios of this being a business throwing out cash and needing very little cash to grow.
The direct taxes paid doesn’t add up either to the profits.
Disc: No interest. Just a customary glance on screener.
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