My notes based on FY24 results:
- Revenues have finally reached back to FY18 levels (Rs 333 Cr). FY19 was when stock was severly derated, and severe de-growth in the business, post IL&FS fiasco.
- Expenses have doubled (220 Cr) since FY18 primarily because of increasd employee expenses. So, with same revenues in FY24 (as of FY18), and doubling of expenses, the profitability has taken a hit (compared with the base of FY18).
- Growth is difficult to come across industry during last 5 years (including CRISIL & ICRA), which has been contrary to my view, which was that growth will come with credit growth in
across time. - Management remains sub par majorly from capital allocation perspective (my views), as they had to be asked many times to do a buyback when stock price was depressed.
Also, I am not sure what they will do with 600 Cr cash holding in their balance sheet since ages, without any need of capital in the business (Off topic but same thing applies in asset management companies (UTI AMC, HDFC AMC) which holds ton of cash without any need in the business).
This experience taught me that cash cannot be valued at face value in any business. I know it in theory, but knowing is not doing as experience is the best teacher.
Dsiclosure – Invested.
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