Polycab is more like a small town boy, with many things to achieve and fulfill dreams while Havells is like a South Mumbai boy, who is already there, so no motivation to achieve anything in life.
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Any truth to the rumours floating around?
Tax rates are quite high. Unlike Adani companies, the quality of auditor looks fine. PAT and Operating Cash flow are also in line. So, no idea how so much evasion is possible.
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The other argument about promoters booking 1800cr of sales in their personal accounts could be a big one IF TRUE.
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At such point, when promoter is hiding sales from.last 5 years, and if its true, even if to save taxes, then its a huge governance issue and then trusting such management for future is not easy. I purchased this, instead of havells due to high growth and growth-hungry promoters. But if they are unethical, then what decision to take? Today its down by 9% , but I dont want to take decision in haste and not without verifying these claims. What should be the correct strategy? This is my highest weightage bet as well as highest profitable bet.
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Same for me - largest position with 5x returns. For me, I would like to wait and see more proof emerge - right now its a single 3 min interview on Zee News by a reporter who quoted his âsourcesâ that got picked up by everyone else. A lot of marque promoters have entered recently and I expect they would have done their due diligence.
In any case it can go one of 2 ways - Lux industries (full pitai) or Hero Motocorp (market has shrugged of the multiple IT raids). Wait and watch till results I would say.
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200cr to 300cr is small compare to the revenue they been generating but integrity is very much important for fii ,diis or anybody
CG issues in an overheated market and stock have no tolerance. Correction is far from done. 4400 will be a key support before any damage corrections happen from company management. Playing silent or deflecting allegations will bring it to close to 3600 (25% further down).
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https://www.bseindia.com/xml-data/corpfiling/AttachLive/00a14cae-29bc-43f1-b8fb-2fae0d56c971.pdf
They did a press release and same can be found on the BSE website. The company has come out refuting all the rumors regarding tax evasion. They have also mentioned that there is no outcome yet from the income tax deportment regarding the search.
Itâs good to see the management coming forward with the clarification. This can be seen as a positive step from the management but itâs still good to wait until an official communication comes from the income tax department.
Nevertheless, the stock is under tremendous pressure and this press release from the management should somewhat cool down the panic selling.
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Check the facts. Also, consider past business reporting correctness, related party tx and behavior towards minority shareholders.
If everything looks okay, then evaluate possibility of business growth in near future and valuation in relation. Of-course, your opportunity cost.
It is really tough to find consistent reliable, and able Managing Partners (Promoters).
This is one of the factor that makes long term equity investment challenging.
All the Best.
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Nothing different from earlier clarifications. There is no smoke without fire, price action says more than what company refuses to say. 6 months gains nearly wiped off in a single day.
https://x.com/sahilbhadviya/status/1745117515628613681?s=20
BIG BREAKING Polycab - Income tax confirms Polycab has made unaccounted cash sales of around Rs. 1,000 crore which are not recorded in the books of accounts. Evidences of unaccounted cash payments of more than Rs. 400 crore made by a distributor, on behalf of the flagship company towards purchases of raw materials, have also been seized.
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2.2% (1200 crores +) Equity purchased in block deals at 3900. I feel this is a severe over reaction. Cash transactions are common in this space - it will take a lot of time for IT to prove whatâs been recorded and whatâs not and how culpable the promoters are.
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Waiting to hear what the company has to say about the income tax findings but it always amazes me how promoters donât think about the larger picture. In trying to save a bit they lose so much more in wealth destruction. Do they think they wonât get caught? It makes âsomewhat senseâ from a promoterâs perspective if the company is not doing well and cooking the books but here they seem to be underreporting if anything. Just ridiculous for a company with this kind of market cap.
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Findings of Income Tax Department if proved correct could be a dampener for this compounding business. This stock could be an ideal long term candidate provided such things are found incorrect or stopped by the Management.
Sometimes, I feel that, it is good to observe newly listed business for at least 5 years before investing. I have not invested in this stock in 2020 due to its very limited history on exchanges. I was not able to decide the P/E range for this stock at that time.
In past few years, lot of new companies have been listed on exchanges. Low corporate governance by such newly listed companies will dent the confidence of investors.
Though it is early to conclude the wrong doing by the management in this case, but certainly does not look good for such a large business.
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Even if we consider that this transaction is done by management , still the amount is not substantial compared to the size of this business. Ultimately company is a market leader in cables and wires, and in FMEG also a leading player. That business will not vanish in thin air, neither its leadership in market is challenged by other players due to this fiasco. They why so much over-reaction?
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if media reports to be believed company did some 1000 crores sales in cash transactions.
If found guilty they need to pay tax plus some penalty.
On 1000 crores 10% net profit equals 100 cores and 30% tax is on net profit equals 30 crores.
Even if we assume 100% penalty company will be required to pay 60 crores. Assuming management learnt its lessons those unaccounted sales transactions will become part of sales from next reporting.
Stock has already lost 30% since the news and current market cap is at 60k crores. So for 60 crores impact company has lost 25k crores market cap??
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