Thanks @aditya14920251 .
@Krishna19 in additiion to what Aditya mentioned please do check the break-up of depreciation. Many a times amortisation is also clubbed with it.
Within depreciation for red flags please check whether company is disposing off assets fast. If life of asset is ~10 year and company disposes those assets in substantially less time than its a red flag.
Please check the break-up of assets to understand what is being written-off and/or disposed off. Many companies may write off computers, equipments etc faster and may buy them too much to write them off again (basically a red flag).
One of the company i recently invested has ~200 crores of sofware/database capitalised (out of total assets of ~600-700 crores) and they amortise ~25-30 crores annually. I am not able to understand that if that is something I need to worry. So my allocation in this stock is negligible as of now. Also management is not doing any concalls so that to understand it better.
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