Had looked at the company last year, please correct me if things have changed since then till now.
Good business but the promoters are not willing to invest in the business nor paying out cash to the shareholders. Company is sitting on more than Rs.400 crores of cash which is invested in Bond funds. Lost money in Franklin Credit Fund fiasco. Rs.136 crores is invested in equity of Genesis Exports Ltd which is the holding company of the promoters which in turn holds 46 % in La Opala. This cross holding benefits only the promoters to the detriment of minority shareholders. You have pointed out about the high promoter salary and no information sharing with shareholders due to absence of investor concalls or presentations. There is scope for increasing dividends substantially since capex requirements are negligible. Capacity was raised in FY22, but sales growth has not happened since then. Overall, promoter interest to take company to greater heights seems missing.
With a slight change in management approach, the stock will get rerated as business has a lot of potential, but the promoters are not doing justice to it.
(Disc.: No positions)
Subscribe To Our Free Newsletter |