I don’t agree its a good business as in it isn’t a good industry, look at the performance of any of the other listed players. There is no pricing power, RM cost is highly variable and volatile but governments are on your back all the time to not pass on price increases, working capital management is extremely challenging because of the kind of customers (look at Jain irrigation or any of the pipes players who largely cater to rural areas to understand what I mean).
Nevertheless there is a huge gap between how Avanti has done and how the its compatriots have performed. It may be management quality or it may be books not being pristine or a bit of both, I am simply unable to tell. Better to track and sit out till there are signs of cyclical turnaround which at the moment there are none.
| Subscribe To Our Free Newsletter |
