So my issue is not with the margin but decreasing margin. Earlier the company use to have ~10% margin but is now dropped to 6%
wouldn’t this increase the employee cost as these new laws are generally employee friendly and they might add up the compliance cost? and hence, that would benefit the unorganized sector?
Debt has reduced but still not low. It has the interest coverage of 3-4 which I think is adequate but looking at the financials it appears that the growth is on the pretext of the debt (inorganic growth) and not organic growth of any of the streams (except the security camera division but it’s a small %age of the total revenue) so to achieve 20-30% of growth they might have to keep acquiring companies leading to debt never leaving the balance sheet. Any views on this?
Also small point I noted, their receivable days are also increasing. Can you share some points to show that management is capable and competent as you said?