Grateful if you can share specific points around this. In my view, broadly the topline and expenses are in-line with last quarter. The main impact is due to change in inventory figures which lowers PAT (rather artificially).
The built-up in the inventory is clearly evident on the Balance sheet - currently ~316 cr (against market cap of ~488 cr., wow!!). The question remains whether is it due to some specific reason:
- Whether it is for feeding the new capex which they were to start in Aug-2019 OR
- Whether there is lack of demand and hence piling up OR
- Whether some inventory is not usable but still they haven’t written-off
I don’t have answer to this yet, but if someone manages to speak with management, that would be great.
Overall, the cashflows look healthy, but again 44 cr. stuck in inventory in 1H is not an encouraging sign unless there is any good valid reason.
One very good point which I notice is that they seem to have paid almost entire working capital loan (see cashflow from financing activities >> 1H’19 itself they paid ~70 cr WC loan + interest of ~5.5 cr., with ~20 cr loan outstanding now).
If anyone is aware about the progress of new capex, kindly add. I noticed that fixed assets have not moved much.