The company is expanding their capacities aggressively. And looking at the forecast, it looks like there will be a lot more capex planned in the years to come. This is where most of the outflow is over the past couple of years:
On the operations side - receivables have been growing year over year. This often reflects as lower CFO as profits are not converting to cash on the company’s books immediately. This is also what is causing the debtor days to increase. In my opinion - the company seems to be focusing on grabbing market share, and is compromising on the quality of the deals (lenient payment terms) in order to do so. Hopefully as the company’s client base matures, the receivables on the balance sheet also improves with time.
And regarding the lack of institutional holding, I often like to quote Peter Lynch’s ‘One up on wall street’
“If you find a stock with little or no institutional ownership, you’ve found a potential winner. Find a company that no analyst has ever visited, or that no analyst would admit to knowing about, and you’ve got a double winner. When I talk to a company that tells me the last analyst showed up three years ago, I can hardly contain my enthusiasm.”
His theory is to get in before the institutions. If institutional ownership is already high, there’s not much room to grow. Just some food for thought.
Tuesday, 4th February 2025: Sigachi Industries Limited, a leading player in Pharmaceutical
Industry provided an update regarding its efficient resource deployment and enhancing
R&D Productivity by establishing Research and Development facility in Hyderabad, India.
This strategic initiative involves an investment of up to USD 1 Million and is set to
commence immediately, reinforcing Sigachi’s commitment to innovation and long-term
growth and efficiency