I have a question regarding acquisition of EFC(I). company could have bring a ipo directly by name of EFC Ltd . Why they acquire Amani Trading and Exports Limited and then change the name to EFC(I)?
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This canât be seen as anything but a red flag.
The promoters also have another company called TCC Concept where they issued 1.3 Cr shares to shareholders of another subsidiary called NES at a price of 352/share whereas TCC had a CMP of 688/share at the time.
Thereâre issues with all 3 listed co-working companies. Kontor has a Rolls Royce vehicle loan on their company books and are also doing a business loan with their generated cash which is even shadier.
Not sure about Awfis but theyâre VC funded and unprofitable.
Also, a bunch of related party transactions in AR23, who is this Pratik Makkar to whom theyâve given ~3 Cr unsecured loan.
Also, weird terminology in loans given, received section for each person. Not sure if Umesh has given or received a loan.
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Itâs strange that TCC Concept has gone 10x in last 9 months. Their main source of revenue is broking (I assume itâs real estate broking. And somehow related to EFC) Other source of income is rental and leasing of equipments. They might be leasing equipments to EFC. Though itâs just a hypothesis for now
Now they have acquired a Data Center Company called NES for more than 400 crs.
SageOne is invested in TCC Concepts as well.
We can ask about this in next concall
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In Bull MarketâŚthere are many ways for promoters to be rich ! One of my broker friend was giving one example. company A was not very well known in market and share price was at at low PE. Now company A do a deal with very well known investor(s) and issue shares with discount. The well known investors name flags in all social medias with its holding in company A along with rosy story created by good content creators. Share price risesâŚpromoters issue more equityâŚacquired anther dump company by issuing equityâŚand cyclone go on and on. Retail normally catches train late and have stamped to board the train at any priceâŚthis goes on till market tide turn and promoters cashing out money at the maximum !! at the end investors and promoters known well in advance when to exit and but retail investors remain trapped in hopes keep losing money and become poorer !
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Came across this term Lease liabilities and Right of use assets on balance sheet of Awfis ~ indicatively 570 cr of lease liabilities and Rs 580 cr of Right of Use assets as on Mar 2024. I understand that lease liabilities are the present value of lease payments to the landlord/commercial space owner over the lease term. Any idea if this is net of the lease payments to be received from the client by the occupier. Thanks a lot
Ofcourse not,
Pl. Rwfer Ind AS 116 youâll get your answers
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Thanks got the clarification. A follow up on the contract tenure. Got this input from the concall transcripts. What are your views on Asset Liability Mismatch. Thanks again
EFC
a) Average client contract tenure: 2-3 years (Managed space)
b) Average landlord contract tenure: 5 to 8 years (Straight lease)
Awfis
a) Average client contract tenure: 33 months
b) Average landlord contract tenure: 5 to 10 years
any body know what is this directors âLoans receivedâ and loan and âadvancesâ? apart from remuneration
Q1FY25 Concall Highlights:
Financial Performance:
- Consolidated Revenue: INR 105.28 Crores, up 82% YoY
- EBITDA: INR 49.62 Crores, blended margins of 45%.
- Profit After Tax: INR 15.77 Crores. More than 5X as compared to Q1FY24
- Rental Segment Revenue: INR 66.79 Crores (63.44% of total revenue)
- Design & Build Turnkey Contracting Segment Revenue: INR 35.30 Crores (36.56% of total revenue)
Operational Performance:
Managed Office Business:
- Increased leasehold area by 300,000 sq ft across 7 centers in 4 existing cities.
- Added 7,000+ seats, bringing total seating capacity to over 47,000. By the end of this year, company will easily be around 65,000-70,000 seats.
- Acquired 80,000+ sq ft property in Pune for development and leasing.
Design & Build Division:
- Secured contracts exceeding INR 75 Crores across various sectors.
- Completed a 100,000 sq ft project for Coforge in 62 days.
- Currently negotiating contracts valued at over INR 100 Crores.
Furniture Manufacturing Segment:
- Secured regulatory approvals for a new manufacturing facility in Pune.
- Workforce of 200+ people.
- Production trials to commence in August 2024, with commercial production starting in September 2024.
- As per management, one simply cannot just bring capital and starts manufacturing of furniture, thorough understanding is required along with right blend of team.
Future Outlook:
- Target to double topline by FY25, with blended EBITDA Margins of 30%.
- Management sounds confident and ready for the next 3 years.
- Managed Office Business: Aiming to add 30,000-40,000 seats annually for the next three years.
- Design & Build Division: Confident in achieving year-on-year doubling of revenue.
- Furniture Manufacturing Segment: Projected to achieve INR 250-300 Crore topline by FY26. Commercial production is set to be launched by September 2024.
- This year, company is expecting INR 50-75 Crores contribution in topline from the furniture segment.
Other Important Points:
- REIT: Incorporated a real estate investment trust (REIT) with a corpus of Rs. 499 Crores. By the end of this month or beginning of September, EFC should get approval for the registration of their REIT.
- Inorganic Growth: Focusing on strategic acquisitions like Big Box.
- Competitive Landscape: Acknowledged increasing competition but believes in their integrated business model and pan-India presence.
- Acquired a 51% stake in Big Box Venture Private Limited. Big Box was already doing INR 2 Crores topline per month, with about 2800-2900 seats and since acquisition BB has added 2000 more seats.
- Bigbox Venture, has an impressive portfolio of over 3000 seats in Pune, is aggressively expanding into NCR region, Ahmedabad and Kolkata, significantly enhancing EFC overall market presence.
- The Pune acquired property will be used for managed office space only.
- As of now, focusing on nine prominent cities only ( NCR region, Bangalore, Hyderabad, Chennai, Gujarat, Ahmedabad, Bombay, Pune and Kolkata ), but going ahead EFC is also looking to expand in other cities as well, where certain developments are happening like Indore, Coimbatore and Chandigarh.
- One Instance shared by management:
- Management admitted that inorganic growth is necessary for any company in this space.
- Management on Acquisition Strategy:
- Management admitted that this space has no entry barrier, but to get to that efficiency level at which everybody like EFC is operating, thatâs not going to be very easy for every new entrant and also to become a significant player.
- All the seats which are getting developed might not get occupied immediately, because there is a lag between the development and the occupation.
Concerns:
- Management was hesitant to answer some questions regarding TCC Concept RPT with EFC.
- The competitive intensity is increasing in this sector, which needs to be watched out.
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Recent Promoter Interview with Kushal Lodha
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It is always good to listen promoters. However, we need to be cautious and we should know what we are paying for buying a SME / Micro / small / mid cap company on words of the promoters.
It is not good to compare EFC (I) Promoters with Manapasand Beverages Ltd. However, to refresh everyoneâs memory on how promoters of this company was selling stories and all well-known analysts / magazines were promoting his vision ! We all know how many retail investors lost their wealth by investing in this company. Following are few links -
(1) Listen (@ 10 minutes) Manpasand Beverages Ltd promoters - https://www.youtube.com/watch?v=BuJXPzvul88
(2) Forbes article - Dhirendra Singh Makes A Fortune Selling Juice To Indian Small Towns And Villages
(3) Motilal Oswal report - https://www.motilaloswal.com/site/rreports/636223141693228805.pdf
In 2017 - Manpasand Beverages Ltd was selling at higher PE than Varun Beverages ! People who loved stories of promoters and entered Manpasand Beverages lost wealth and people who trusted professional promoters, having profession brands, created wealth- irony is Varun beverages was cheaper than Manpasand in 2017!
In bull market, no one has doubt on any dream sold by the promoters and buying without thinking what they are paying !! Such people sometimes earn money but most of times learn it hardaway !
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Thanks for this bro! Got to learn a lot and still much more to learn⌠THANKS A LOT 
Needed a rejig/shake like that to tread cautiously 
Following my points on this video -
(1) I could not digest the statement on potato as he was in final year of B Sc. Agriculture and he was not knowing where potato grows underground or aboveground!!. I can believe if he is not graduated in Agriculture science - integrity of the promoter !
(2) One man army can work for small level business but not if he want to grow company to mid/large cap. His approach looks like âJugadâ do it at lowest cost. Most of people are from his association. To grow company, professional talent has values and promoters should give respect to talent in respective area
(3) Promoters mentality / thinking is good to grow company from micro to small cap but such approach can not work for further growth of the company
(4) I shall remain cautious and keep track on equity dilution, related party transactions and quality of growth and quality of clients they get for office occupancy!
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The following are the top 10 employees in terms of remuneration. CFO of company with 428cr sales is earning 15 lakhs per year with no equity. Enterprise sales and acquisition North india with 14 years exp is earning 5 lakhs. Network engineer is earning 1.15 lpa. My cook is earning more than that. Very strange.
Initially I thought these were per month salaries. But no the following shows that these are annual salaries:
There are only 17 employees on the rolls of a 2500 cr market cap company. In the video he says heâs giving employment to more than 1000 people. Something doesnât sound right to me but hopefully Iâm wrong
Disc: Invested (but now reevaluating)
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@hnk_so The spirit of the forum is to do some work yourself and then ask for feedback or inputs. This is not a paid expert network providing insights to people who want to deploy money. All participants contribute to the work.
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@nirvana_laha - I open heartily accept my weakness in deeply understanding / assessing balance sheet of a company / not able to detect financial irregularities. You will agree with me that every one are not expert in all areas. However, wherever I can contribute, I am doing but where I donât have competency, I donât want to try and confuse others!!
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As per the results declared for Q4 FY 24, standalone entity employee expanses are only 1.37 crore while for consolidated it is more than 14 crores which looks ok. The above figure is for standalone not for subsidiaries it seems??
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