BIG BLOC Construction -Building Material

BigBloc Construction Concerns

I have seen recently many investors getting Gung-Ho on this company but I somewhat don’t feel comfortable with this company due to multiple reasons.

1- Reasons of Bad Q4 -due to Holi vacation- shortage of Labour in both construction site and plant.

In Q3 concal, they mentioned → there was a volume reduction in q3 due to extended monsoon.

I personally could not digest these reasons. These all reasons are quite insane to be given and how can a investor buy those reasons without thinking twice? All thanks to the price movement in stock which actually give them the confirmation bias make them bullish unnecessarily thinking it’s all good.

Holi was there in Q4 last year also. Then why such issue this year? (As mentioned above by another investor)

2- Percentage increase of Sales– 14.20% and 21.57% in March 2023 and March 2024 VS percentage Increase in Receivables– 18.35% and 67.90% in March 2023 and March 2024 respectively.
Parallelly Percentage increase in Inventory– 75.20% and 46.19% in March 2023 and March 2024 respectively which makes me suspicious about their sales numbers.

3- Their EBITDA margins are almost double of their competitors even from the largest player in the industry which again makes me more suspicious without any strong justification for the same that how are they able to operate on such a high margins catering to B2B clients that too in a Real Estate sector.

4- Also CFO/Ebitda is 56% and 35% in March 2023 and March 2024 respectively which is considerably low, which again is alarming.

5- If their ROCE is north of 30% then why their is still rise in Net Debt I know one will argue that they are in expansion phase even considering that the debt shouldn’t increase if the ROCE is north of 30% there are companies who have executed the expansion without increasing the Debt to this level considering their ROCE was also in line with this company.

I know I’m making this contra perception and many won’t agree to this but feel free to share your opinion and kindly correct me if I’m wrong somewhere in my analysis.