Few Observations on this business:
1- Statement of Cash Flow FY23:
To arrive at ‘Net Cash generated from Operating Activity’, ‘Direct Taxes Paid: 46 Cr.’ shall be subtracted from ‘Cash Generated from Operations: 78 Cr.’. Hence, this amount shall be 32 Cr. instead of the reported amount of 124Cr.
2- Income Statement of FY22: Provided amounts seem to be of only Q4. The same is inferred from the note: “Figures of the previous financial year ended March 31,2022, have been restated to give effect to the Scheme with effect from January 1, 2022.” This provides a bad base to compare the FY23 numbers. However, management used these numbers to show the improvement under heading “Profit and loss indicators”.
3- Compulsorily Redeemable Preference Shares: What’s the purpose of these? What is the price at which these will be bought back by the company?
3- Hazy reporting in the AR.Few Instances:
- How many stores were added in the last 1 year or over the years?
- What’s the future plan of action (Startegy), no word in the MDA section?
- What for the Capex of 163 Cr. was used in FY23?
- Why no explicit provision or write-off for the slow moving inventory although accounting notes talk about this aspect? Note: Inventory amounts to half of the balance sheet assets.
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