Hi,
Impressed with your way of extracting information and completely agree with your understanding here.
This is a case where promoter is good, long term business potential is good but in the short term there have been head winds. The other good thing about MCS is its transparency and discipline with respect to revenue figures. They consistently grew their sales for 10 years at a stretch. However, as they tried to expand sales in other states away from their comfort zone(Kerala), they are facing some problems.
During ILFS crisis, when there was serious liquidity crunch, they were able to get some capital through securitizations. This would have affected their cost of capital, it being a small NBFC and in turn reduction in net profit. Good thing is, they were able to run the show and became more resilient. It also offers FD at the rate of 7.5 to 9% so that they can reduce their cost of capital. Its market cap is 674 cr and it has 2596 cr as assets under management. They have sales touch-points around 4000 branches.
Basically, if we know a stock that will stay in business, consistently showing sales uptick, having a good promoter within a big opportunity size sector, then most of the work is done. We can weave around this certainty by adding in dips when the market provides opportunities. For a long-term investor, it looks a good bet.
Disclosure - Invested at high valuation in 2018 and averaged at sub 300 levels in 2020. Portfolio - Southern_Cross's Portfolio - #16 by Southern_Cross