Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Forensic Accounting

Emerald Finance Limited is a financial services company. The Company offers banking products and financial services to corporate and retail customers, as well as provides artificial intelligence based loan management solutions. Emerald Finance serves customers in India.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/emerald-finance-ltd" target="_blank" data-smartkarma-citation="entities:44167:1" rel="noopener">Emerald Finance (EMERALD IN)</a> is a Chandigarh-based NBFC. Since receiving its NBFC license in 2015, Emerald has broadened its offerings to include personal loans, business loans, and Early Wage Access.</li>
<li>The Company focuses on retail and MSME lending and acts as a loan origination platform for over 40 financial institutions through its subsidiary, Eclat Net Advisors Private Limited.   </li>
<li>Onto the forensics, there are unsecured loans to RPs, representing 15% of the networth, large amounts of cheques-in-hand reflected under Other loans and advances and incorrect calculation of EPS</li>
</ul>



Emerald Finance (EMERALD IN) is a Chandigarh-based NBFC. Since receiving its NBFC license in 2015, Emerald has broadened its offerings to include personal loans, business loans, and Early Wage Access.
The Company focuses on retail and MSME lending and acts as a loan origination platform for over 40 financial institutions through its subsidiary, Eclat Net Advisors Private Limited.   
Onto the forensics, there are unsecured loans to RPs, representing 15% of the networth, large amounts of cheques-in-hand reflected under Other loans and advances and incorrect calculation of EPS


Vishal Mega Mart Private Limited operates as an online apparel store. The Company offers tops, shirts, skirts, jeans, dresses, palazzo, and other related products for men and women. Vishal Mega Mart serves customers in India.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vishal-mega-mart" target="_blank" data-smartkarma-citation="entities:44041:1" rel="noopener">Vishal Mega Mart (1620871D IN)</a> IPO worth INR 80 bn is about to open this week. The IPO constitutes entirely of OFS. </li>
<li>The company is one of the top 3 offline first retailers, the most diversified retailers and caters to middle income and lower income group, largely in Tier 2 locations. </li>
<li>As far as forensics are concerned, one must pay attention to exorbitantly high attrition levels, rising related party transactions, few puzzling line items noticed in books, etc.</li>
</ul>



Vishal Mega Mart (1620871D IN) IPO worth INR 80 bn is about to open this week. The IPO constitutes entirely of OFS. 
The company is one of the top 3 offline first retailers, the most diversified retailers and caters to middle income and lower income group, largely in Tier 2 locations. 
As far as forensics are concerned, one must pay attention to exorbitantly high attrition levels, rising related party transactions, few puzzling line items noticed in books, etc.


Delta Manufacturing / Forensic Accounting

Delta Manufacturing Limited manufactures hard ferrite magnets. The Company produces magnets for loudspeakers, automobiles, entertainment electronics, information and communication applications, power supply products, and medical appliances. Delta Manufacturing serves customers in India.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/delta-manufacturing-limited" target="_blank" data-smartkarma-citation="entities:44119:1" rel="noopener">Delta Manufacturing (DELTAMAG IN)</a>  manufactures hard-ferrite magnets, which it sells to OEMs and also manufactures garment trims in India i.e. woven labels, heat transfers, fabric printed labels, etc.</li>
<li>DMG's market cap is just about INR 1.2 bn but faces grim, loss making operations</li>
<li>Other forensic setbacks include lack of FCF generation on the back of muted capex, cash flow misstatements, goodwill impairment, dependency on low cost promoter debt, etc.</li>
</ul>



Delta Manufacturing (DELTAMAG IN)  manufactures hard-ferrite magnets, which it sells to OEMs and also manufactures garment trims in India i.e. woven labels, heat transfers, fabric printed labels, etc.
DMG's market cap is just about INR 1.2 bn but faces grim, loss making operations
Other forensic setbacks include lack of FCF generation on the back of muted capex, cash flow misstatements, goodwill impairment, dependency on low cost promoter debt, etc.


Delta Manufacturing Ltd- Forensic Analysis

Polymatech Electronics / Forensic Accounting

Polymatech Electronics Limited was originally incorporated as Polymatech Electronics Private Limited on May 29, 2007. The company is the first opto-semiconductor chips manufacturer in India. They have a manufacturing facility in Kancheepuram, Tamil Nadu and have bought a BTS (Built to Suit) facility in Krishnagiri, Tamil Nadu. The products of the company are categorised as fully packaged opto-semiconductor chips and luminaries, which are LED lights used for commercial purposes.

They began the opto-semiconductor chips production in 2019 and use European and Japanese technologies to offer high-quality products to meet international standards. The company designs, fabricates, manufactures, packs and assembles the opto-semiconductor chips and sells them directly to customers. These chips are also used in their luminary assembly. The company’s luminaries are installed at several factories, temples and stadiums, such as Vishay Precision Group, Shin-Etsu, Japan, Sawai Mansingh Stadium, Parthasarathi Temple, Chennai and more.

The opto-semiconductor industry in the world is expected to touch USD 59,224 million by 2028 from USD 43,780 million in 2022. The growth is primarily driven by the automotive sector and infrastructure providers to provide lighting in commercial spaces or households. The company can benefit from the demand.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/polymatech-electronics-ltd" target="_blank" data-smartkarma-citation="entities:44111:1" rel="noopener">Polymatech Electronics (POLM IN)</a> revenues have skyrocketed by 27x in the last three years, but the balance sheet is filled with several red herrings. </li>
<li>Topline looks out of sync with production and have been largely aided by receivables. Being an R&amp;D oriented company, the R&amp;D expense only appeared in FY24, when sales were INR6bn</li>
<li>Mis-Classification of cash flows, questionable RPT with promoters, dubious transition towards IND AS, absurd nature of some key expenses, also warrant attention</li>
</ul>



Polymatech Electronics (POLM IN) revenues have skyrocketed by 27x in the last three years, but the balance sheet is filled with several red herrings. 
Topline looks out of sync with production and have been largely aided by receivables. Being an R&amp;D oriented company, the R&amp;D expense only appeared in FY24, when sales were INR6bn
Mis-Classification of cash flows, questionable RPT with promoters, dubious transition towards IND AS, absurd nature of some key expenses, also warrant attention


Polymatech Electronics Ltd- Forensic Analysis

Narayana Hrudayalaya Ltd / Forensic Accounting

Narayana Hrudayalaya Limited operates a network of hospitals. The Company offers cardiac surgery, cardiology, diabetes and endocrinology, gastroenterology, general surgery, neuroscience, facial surgery, nephrology, obstetrics and gynecology, orthopedics, oncology, pediatrics, transplant, and urology services. Narayana Hrudayalaya serves patients worldwide.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/narayana-hrudayalaya-ltd" target="_blank" data-smartkarma-citation="entities:26939:1" rel="noopener">Narayana Hrudayalaya Ltd (NARH IN)</a> is on an expansion spree and looks to add further 1500 beds in the next four years, to its 5683 operational beds as at FY24.</li>
<li>As far as forensics are concerned, the company has shown improvement in its capital allocation, shown ramp up/turnaround in some hospitals; also impairments are done with in the past. </li>
<li>However, few concerns loom over PPE disposals and non-reconciliation with cash flows, treatment of reversal of provisions and high growth rate assumed in goodwill CGU.</li>
</ul>



Narayana Hrudayalaya Ltd (NARH IN) is on an expansion spree and looks to add further 1500 beds in the next four years, to its 5683 operational beds as at FY24.
As far as forensics are concerned, the company has shown improvement in its capital allocation, shown ramp up/turnaround in some hospitals; also impairments are done with in the past. 
However, few concerns loom over PPE disposals and non-reconciliation with cash flows, treatment of reversal of provisions and high growth rate assumed in goodwill CGU.


Nitin Mangal is a Research Analyst with more than 15 years of experience in Indian equities. He is Pioneer of Corporate Governance and Accounting Research in Indian Market and has successfully developed product for Institutional Investors named as "Analysis Beyond Consensus" during his association with Edelweiss Securities Ltd, Mumbai. Later during the career, he has worked with Veritas Investment Research Corporation, Canada as Asia Consultant covering Indian and US equities. He has been profiled by leading financial newspapers such as Wall Street Journal, Business Standard etc

Nitin Mangal
Indian Accounting Research Analyst
• Trudence Capital Advisors

Emerald Finance Ltd- Forensic Analysis

Emerald Finance focuses on retail and MSME lending, acting as loan origination platform for over 40 FIs. Forensic concerns include unsecured loans...

Nitin Mangal

Vishal Mega Mart IPO- Forensic Analysis

Vishal Mega mart is one of the large value-retailers and caters to middle/lower income groups in Tier 2 locations, but high attritions, notices...

Nitin Mangal

Delta Manufacturing Ltd- Forensic Analysis

Delta Manufacturing (DELTAMAG IN) faces challenges with loss-making operations, lack of FCF generation, and other forensic setbacks despite its...

Nitin Mangal

Polymatech Electronics Ltd- Forensic Analysis

Polymatech Electronics' revenue has surged 27x in 3 years, but red flags in balance sheet include reliance on receivables, misclassification of...

Nitin Mangal

Narayana Hrudayalaya: Forensic Review

Narayana Hrudayalaya Ltd is showing improvements in capital allocation and turnaround in few operations, but facing concerns over PPE disposals,...

Nitin Mangal

Emerald Finance Ltd- Forensic Analysis

Emerald Finance focuses on retail and MSME lending, acting as loan origination platform for over 40 FIs. Forensic concerns include unsecured loans...

Nitin Mangal

Vishal Mega Mart IPO- Forensic Analysis

Vishal Mega mart is one of the large value-retailers and caters to middle/lower income groups in Tier 2 locations, but high attritions, notices...

Nitin Mangal

Delta Manufacturing Ltd- Forensic Analysis

​Delta Manufacturing (DELTAMAG IN) faces challenges with loss-making operations, lack of FCF generation, and other forensic setbacks despite its...

Nitin Mangal

Polymatech Electronics Ltd- Forensic Analysis

​Polymatech Electronics' revenue has surged 27x in 3 years, but red flags in balance sheet include reliance on receivables, misclassification of...

Nitin Mangal

Narayana Hrudayalaya: Forensic Review

​Narayana Hrudayalaya Ltd is showing improvements in capital allocation and turnaround in few operations, but facing concerns over PPE disposals,...

Nitin Mangal

Delta Manufacturing (DELTAMAG IN) faces challenges with loss-making operations, lack of FCF generation, and other forensic setbacks despite its...

Polymatech Electronics' revenue has surged 27x in 3 years, but red flags in balance sheet include reliance on receivables, misclassification of...

Narayana Hrudayalaya Ltd is showing improvements in capital allocation and turnaround in few operations, but facing concerns over PPE disposals,...