the company hasnt put capex or shown significant volume growth in past 5 years.
the OPM of the company keep fluctuating, since there is not much pricing power enjoyed by the company. Main RM - Polyester fibre , whose prices keep fluctuating
the cash flows earned by the company in past 2 years have been used for investing in non current investments like mutual funds,bonds, equity instruments etc. This shows that there is not much demand for the company’s product and no scope to expand.
however the company is trading at price of 140 cr vs a share holder value of 190 cr.( reserves+ equity capital). but this difference is too less for there to be an increase in market value, and such value normally does not get unlocked in my opinion.
the company has obtained a NBFC license from the RBI for its subsidiary APM Finvest Limited.
i believe since the company is not able to expand it is using its cashflows to invest in securities, and entering a new line of business. this is a huge negative for me , as most of the textile players are putting up capacities to cater to increasing demand . Plus with no experience in financial services , it is difficult to predict how things will turn out for the company.
Regards
Shikhar