Hello all,
I am new to this forum, to apologies for any amateur comments. Thank you all for making this forum to insightful and especially this thread. I have been studying Pokarna for the past few days and really think the intrinsic business of the company is extremely robust. This is further supported by me reading of all your posts. Inspite of the 2 year run up of the stock, the company appears to be trading at compelling valuations. Two things however are keeping me from investing into the stock as per my reading of the 2015 AR:
-
As soon as the company posted a decent set of results, the promoters have immediately raised their remuneration limits to the maximum possible. Remuneration to directors increased from 68 lakhs to 288 lakhs. I am not saying that the management does not deserve this (even though I don’t understand the rationale of hiring Mr. Apurva Jain and directly making him a director)
-
There are dues worth > 60 crores to Pokarna Fashion, Pokarna Fabrics and Pokarna Marketing (all are associates of Pokarna). These are currently shown as currently liabilities but optically they appear to be cookie jar reserves kept in the company by the promoters. So whenever the company makes good cash flows these liabilities will be paid off.
All in all – my only concern about the company is whether the management is shareholder friendly and whether they will try to take a big slice before any returns trickle down to the shareholders
I do understand that Management owns ca. 56% in the company to my concerns are alleviated to some extent. But if anyone can offer some more insights into this it would be extremely helpful.
| Subscribe To Our Free Newsletter |
