Any idea why the EBITDA margins are down and why is the interest going up every quarter ? Is it a cyclical business because there is no stable margin guidance on this one.
In my opinion, now a days people are not in position to believe numbers posted by such small cap companies as all are trying to inflate numbers to ride the share price.
Topline growth is indeed great! 350 Cr topline company available at 390 Cr market cap is indeed an attractive proposition. But can you please throw some light on the sustainable margin profile and why have the margins taken a hit in this quarter? Is it because they have launched some new products and are selling them at a discount to capture some market share? Moreover the short term borrowings have shot upto 100 Cr and so has the interest. Is there any pressure on the working capital cycle?
I don’t have a lot of details on these things and it would be great if you can help me with this. I have taken a position in this correction over last 2 days. But would be really keen to the business and micro and macro factors impacting it so that I can build my position size and make it sizeable.
Thanks in advance!
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The sustainable margin as per the management guidance is in the range of 11-15%.
You’re Right, The margin hit is due to the launching of new products and expanding to new geographies.
The working capital has increased and there is some pressure there.
The macro factors as they are focusing on the MENA region currently there are geopolitical issues that could be some macro headwinds along with the Red Sea crises, as far as micro it’s how far they are able to scale and transition successfully from B2B to B2C is the thing that to be watch out for.
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On face it looks good but also check inflating inventory and Receivables nos. With so much rise in profit comparing with last 2 years, there is hardly any improvement in cash flow. So will wait till the time cash flow improves
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Numbers looked amazing.
Stock has taken beating post numbers.
Seems street is getting concerned over margin contraction.
Don’t understand why company is borrowing at high intrest costs.
Fredun compensation is a ?