I have been studying Bodal Chemicals since last 3/4 quarters and have attended their conference calls. Although the business is doing well, I have observed that the management says one thing and does another thing. Two recent examples.
- They said capacity expansion will take place with internal accrual till as recently as Q1FY18 con call; now raised equity via QIP
- They said in Q4 con call that their topline will grow by 20% in FY18; with flattish Q1FY18 they said entire year will be flat.
I read their previous annual reports and compared what they said to what actually happened and I noticed many such contradictions.
This might mean one of the following:
- Management lacks ability to confidently predict business environment even in near future.
- Business is unpredictable and no player has any control.
- Management makes quick decisions without worrying too much about what they have recently guided.
Such contradictions make financial forecasting difficult for this company.
Disclosure: Invested 8% of PF @ 130.