Is anyone still tracking this stock, him teknoforge to amalgamated with the company.
Need to know the pros and cons of this merger.
Any one tracking this Company now?
Some time back I was tracking this company, on standalone basis it’s a good company, but found some details of parent company, which was not satisfactory and hence stop tracking it.
This will merge with it’s parent company.
gujarat automotives gears
1.Though good fundamentals but not that much impressive from last 3-4 years as company couldn’t trigger growth button, Last 3 years(15-17) CAGR of sales & profit as 5%, Current trailing year growth is in negative which states company is struggling to grow it sales and profit.
2.Company has taken around 10Crs Debt not for any major expansion but to give loan to corporate firms and also used the surplus cash reserve to lend corporate firms rather than having in banks as deposits which though gives opportunity to company to earn higher interest but then also concern higher risk as almost the complete reserve has been lended as Unsecured loans&advances.(M.cap - 48Crs, reserves - 32Crs, Unsecured Loans - 26.5Crs(approx).
3.So it states that the reserve has not been invested in safe assets or investments instead lended as unsecured Loans which has no capital growth possibility so it doesn’t make sense to pay higher than its book value by stating the stock as undervalued. And if the loan gets defaulted, the book value would also be gone.
4. While anylysis Cash flow, it seems company couldn’t completely convert its profit into cash. So Cash has been stuck in the working capital.
5.I have not researched the stock much deeper as i feel it as riskier investment and dont feel this price as much undervalued though available @ P.E of 8-9.And its a Very Small Cap, Can trap you anytime considering the above risk factors.
Hi @Kalpeshsancheti333 Sir how does the company look now fundamentally, can this be been for CV cycle beneficiary?
Hi harsh, Im sorry but I’m not tracking this company currently and its been long since i left following it so it would not be appropriate if i comment anything on it.