Growth for financials is always easy, e.g. Yes bank. One can grow at any rate if underwriting and risk management is poor as there are always takers for cheap loans.

@harsh.beria93 Sir mein investing ke bare mein thoda bahut hi janta hu lekin mein Jo bhi company study karta hu concall padhta hu vo company mujhe acchi hi lagti he ya to fir really company is good or I am not able to find red flag in company so please share how to find red flag in company and also share what you make convince that yes company is good and worth to invest.
Recently I study about Gujarat themis,AGI greenpac and tega industries and I find this company is good for investment sir please guide.

From recent 2023 annual report, 4 red flags –

1. Significant reduction in profits due to high material cost

2. Seems CRISIL has decreased their rating:

CREDIT RATING
Your company’s domestic credit rating by CRISIL is ‘CRISIL BB+ /Stable (Downgraded from ‘CRISIL BBB-/Negative’)’for
long-term debt facilities and a ‘CRISIL A4+ (Downgraded from ‘CRISIL A3’)’ for the short-term debt facilities.

3. They still have 9.81 Crore income-tax case going on from AY 2008-09.

4. There is chances that Statutory Auditors they hired have relationship with promoters

Statutory Auditors
In terms of the provisions of the Section 139 of the Companies Act, 2013, the shareholders have appointed M/s
Kothari Kuldeep and Co., Chartered Accountants as Statutory Auditor of the Company for a term of five years from the
conclusion of 32nd Annual General Meeting till the conclusion of 37th Annual General Meeting of the Company to be
held in the year 2027.
The notes on accounts are self-explanatory with regards to auditors’ observations. There was no qualification, reservation
or adverse remark made by the Auditors for the year under review.

PS: Not invested. Not thinking too at current valuation.

Hey Harsh currently Ashok Leyland is trading at around1.2x sales and also with regard to EV theme they have a subsidiary Switch mobility but they have not scaled EV business considerably, with possible fame 3 policy targeting commercial utility vehicles as this is actually the industry that makes the best economic sense as usage is high and EVs have low running cost, my only concern with the lack of scale.
What are your thoughts on this business?

Adding to the cons.

1. most of the revenue comes from export to Bangladesh. Recent wage hikes in bangla will have negative impact on the Co.
2. Garment manufacturers shifting from Asia to Egypt etc (closer to Eu and US). Co may not be cometitive in supplying to those cos
3. Inefficient capital allocation. Management doesn’t want to do buyback even when the share price is close to actual book value (cash, inventory) stating that they don’t want to reduce the float. They could do a split / bonus along with Buyback to sustain the liquidity for trading. Shareholders returns should get first priority but not the float as per me.

Disc : Tracking position