Hi Nimit,
I can try explaining some points raised by you.
Receivables: This should be looked as a % of sales and not as a % of profits. Broadly, receivables have stayed around 90-100 days which makes sense as they are exporting to unregulated markets. If you look at like to like peers, here are the statistics for receivables/PAT based on FY22 nos
Bharat rasayan ~ 2.64x
India Pesticides ~ 1.57x
Insecticides India ~ 3.07x
Heranba ~ 2.17x
So Heranba receivables are very much in-line with similar sized companies. Also, we should take into account quality of receivables as a majority of Heranba’s exports are into unregulated markets. If you can do a peer wise comparison, it will be very value additive.
Inventory: Again we should look at this in reference to similar sized peers. Here is the March 2022 inventory nos for Heranba’s peers, Heranba’s inventory nos are one of the lowest.
Bharat rasayan ~ 120 days
India Pesticides ~ 165 days
Insecticides India ~ 208 days
Heranba ~ 100 days
Also, building up inventory can be a business strategy. If you look at quarterly results of agchem cos, almost everyone is reporting fall in margins as cost of intermediates have shot up significantly. In this context, Heranba’s inventory positioning makes sense.
About securitization of receivables: I do not have much expertise in this, so will refrain from commenting. Maybe someone with better understanding can help.
Disclosure: Invested (position size here, no transactions in last-30 days)