There is enough evidence of sectoral and regional tail winds for demand in US but somehow Pokarna has not yet benefited it. From container shortage/price hikes to now excess inventory in Channels (according to mgmt).
My primary concern is that Company’s important customer Wilsonart has started its own production. Company’s top-line is on decline ever since.
In last concall, management mentioned that they are now trying to venture into other geographies such as European countries, Germany was mentioned.
In same concall, they mentioned that it takes 4 months for product to reach Germany once it is shipped!!
Reading between the lines, if company is so desperate for orders that it has to reach such a far-away territory then that does not give me a bullish indicator.
In terms of tail winds, it can’t get much better for the company and we still have these margins and top-line numbers.
However, management may as well be right about excess inventory in the channels because of constant threats of ADD and CVD from US gov. I am willing to give Pokarna 2-3 quarters more to see how it pans out.
| Subscribe To Our Free Newsletter |
