A fantastic thread on very interesting company. Better than any brokerage report in my opinion. It’s a complex business with a lot of moving parts, and estimating the growth or assigning value to the consolidated entity is no easy task.
The company seems to have some sort of competitive advantage, is generating cash, has negative working capital, and is run by a seemingly competent management. One concern I have though, is that the proportion of non controlling interest is growing.
As shown in their investor presentation, it was around 15% in FY22, rising to almost 19% in FY23. It is essentially dilution of equity. I suppose this is a consequence of the business model Pallak Seth pursued, of offering equity and creating subsidiaries for competent people to grow the business. But it does lead to the question- is this the only way the company can grow? How much dilution will happen as the company grows? And will it significantly affect minority shareholder returns?
I would be grateful if some of the experienced investors could share their thoughts on this.
Disclosure - Not invested. Tracking, looking to invest in future.