I am not trying to find holes here. I know it’s commendable how the company is growing and that combined with margins expanding makes it a great stock available at good valuation. But I can’t just ignore what I see and not try to understand the reason behind it.
To elaborate, look at the stand-alone financial statement. The sales for the first half were 379 crores while the receivables increased by 140 crores (from 88 to 228). Now I know that company is doing some B2G business which even the management said was the reason for the rise in receivables. But if almost half of your sales are on credit, that certainly calls for the explanation regarding when will the company actually receive payments for these. Because what I see that the receivables number both at standalone and consolidated basis has been increasing.
If anyone knows more about what might be the reason for this, please feel free to clear the doubt. I am just trying to understand every aspect of it as that is what helps you build the conviction required for a meaningful capital allocation.
| Subscribe To Our Free Newsletter |
