In today’s briefing:
- Indian Companies Are Betting on Booming Capital Markets with Unplanned Fund Raisings
- Dixon Technologies- Forensic Analysis (Update)
- Glenmark Pharma- Value Erosion Not Something New
Indian Companies Are Betting on Booming Capital Markets with Unplanned Fund Raisings
- With Indian capital markets booming, companies are tapping capital markets regularly for fundraising even though they have recently raised funds.
- There are also cases where company after concluding IPO in recent years are going for fund raise
- The market are jittery about possible equity dilution and unclear fund raising objectives
Dixon Technologies- Forensic Analysis (Update)
- Dixon Technologies India Ltd (DIXON IN) growth is driven by mobile and EMS segment; majority of other businesses are muted in the last two years.
- The company is able to convert earnings to cash quickly but cash yield is close to zero.
- The company has reported significant amount of refund liability, but is silent on its accounting policy. Other forensics takeaways include non-reconciliation of asset disposals, high forex risk, etc.
Glenmark Pharma- Value Erosion Not Something New
- Glenmark Pharmaceuticals (GNP IN) FY24 results have seen PBT reducing from INR 2.4 bn to INR 365 mn i.e. by nearly 85%.
- This was on account for exceptional line items, which included gains from sale stake in Glenmark Lifesciences, but was offset by losses pertaining to legalities and heavy impairment in assets.
- The habit of having exceptional items, especially impairments is not something new or one-offs. There have been regular impairments carried in the past as well.
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