Thanks for your inputs and really good to see your digups .There are some more inputs…
The pity of the govt sector is that there is no fixed person for a role every individual have their own aspirations nd goals but they move i am sharing most recent resignation of Sh Sanjeev Singhal, Director (Finance), MIDHANI
The MIDHANI dos not have a structure to work on aggressive basis but working in prudent manner . Being the PSU they have to take al the sanctions and even to spend a single dime they have to get the budget approval this will cause hindrances to it’s growth . The operation is sensitive and secretive in nature which keep the competitors at the bay . But Adani is working aggressively on the defense sector and have close proximity with current government can leads to more disinvestment of the NIGAM Which can be a future threat for the sustainability of the operations but IT MIGHT not happen .
The next thing that you have pointed out regarding the order book. The order book does not guarantee that the production will be done on schedule date or not. if not than some demerge penalty clause of contract will come in to the picture even in the RHP they have mentioned that ,”We cannot assure you that we will be able to deliver all of our existing orders on schedule and that the order book will materialize into our revenue. Investors should not consider our order book as an accurate indicator of our future performance or future revenue. “and further the company has mentioned that ,” Most of our revenue is derived from the work performed under government contracts. While we believe that our programmes are well aligned with India’s national defence and other priorities, shifts in domestic spending and tax policy, changes in security levels, defence, and intelligence priorities, general economic conditions and developments, and other factors may affect a decision to fund, or the amount of funding available to, existing or proposed defence programmes.”
Regarding [quote=“aga.ayush11, post:3, topic:27073”]
High debtor day
[/quote] in page 22 of the annual report they have mentioned that they have improved the debt collection and the most of the debt is from most recent quarter
“ Debt collection was taken up as a focus area for the FY 2018-19. Trade receivable as “No. of Days Sales” has come down to 181 days as on 31.03.2019 compared to 227 days as on 31.03.2018. High accumulation of Debtors is primarily on account of higher sales in the fourth quarter and the budgets getting exhausted at customers’ end, which are primarily Government Departments / agencies”
On R&D front the main expenses is on filing of patents and trademarks in page 23 they mentioned
“ 50 Trademarks/Copy Rights and 9 patents were filed during the year and an Innovation cell under “Center of Excellence- Special Materials” was created to promote Innovation and creativity at MIDHANI.”
I couldn’t find any patents for the company on patents.google .com
The major weakness of Midhani are that Plant and Equipment are age old. There is lack of economies of scale leading to high incidence of overheads and produce on costs. Lack of adequate and matching downstream facilies. Long production cycle. Processing of small lots of various grades requiring tailor made operations. Production on normally involves product development involving long lead times.
Disc: I am studying and digging more before making any investment still I am sitting on the bay This is not any buy or sell of hold recommendation
regards