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

Macroeconomics

<ul>
<li>All eyes will be on the upcoming Union Budget 2024 in July, marking the first of Modi Government 3.0.</li>
<li>Job creation, tackling agriculture woes including farmers income and sustaining expenditure on infra are expected to be the core deliverables.</li>
<li>Moreover, fiscal deficit is expected to continue its improvement run. Capital gains tax would not be touched but GST network could broaden.</li>
</ul>


All eyes will be on the upcoming Union Budget 2024 in July, marking the first of Modi Government 3.0.
Job creation, tackling agriculture woes including farmers income and sustaining expenditure on infra are expected to be the core deliverables.
Moreover, fiscal deficit is expected to continue its improvement run. Capital gains tax would not be touched but GST network could broaden.


Forensic Accounting

Jyoti Resins and Adhesives / Forensic Accounting

Jyoti Resins and Adhesives Ltd provides adhesives. The Company manufactures synthetic resin adhesives. Jyoti Resins and Adhesives serves customers in India.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jyoti-resins-and-adhesives-ltd" target="_blank" data-smartkarma-citation="entities:43694:1" rel="noopener">Jyoti Resins and Adhesives (JRA IN)</a> engages in manufacturing of synthetic wood adhesives under 'Euro’ brand and claims to be the second largest player in its respective market.</li>
<li>While on ground, Euro has gained good traction and has received positive feedbacks, there are however several takeaways noticed on the forensic end.</li>
<li>These include Lack of clarity on revenue figures, low FA base, lack of disclosures of important accounting policies such as leases and customer rewards, etc.</li>
</ul>



Jyoti Resins and Adhesives (JRA IN) engages in manufacturing of synthetic wood adhesives under 'Euro’ brand and claims to be the second largest player in its respective market.
While on ground, Euro has gained good traction and has received positive feedbacks, there are however several takeaways noticed on the forensic end.
These include Lack of clarity on revenue figures, low FA base, lack of disclosures of important accounting policies such as leases and customer rewards, etc.


Jyoti Resins and Adhesives- Forensic Analysis

Shankara Building Products L / Forensic Accounting

Shankara Building Products Limited retails home improvement and building products. The Company offers steel pipes and tubes, roofing sheets, hollow blocks, primers, tiles, plywood, kitchen sinks, and welding accessories. Shankara Building Products markets its products in India.

Shankara Building Products L (SHANKARA IN)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shankara-building-products-l" target="_blank" data-smartkarma-citation="entities:27268:1" rel="noopener">Shankara Building Products L (SHANKARA IN)</a> is seeing a healthy topline growth in the last three years but this is accompanied with margin contractions.  </li>
<li>As far as the forensics are concerned, the company does not have grave auditor red flags like earlier but there are still some eye-catching checks.</li>
<li>Caution must be given to the finance costs of the company which look on a higher side vis-a-vis the borrowings. Moreover, inadequate provisioning might also expose out some receivables.</li>
</ul>



Shankara Building Products L (SHANKARA IN) is seeing a healthy topline growth in the last three years but this is accompanied with margin contractions.  
As far as the forensics are concerned, the company does not have grave auditor red flags like earlier but there are still some eye-catching checks.
Caution must be given to the finance costs of the company which look on a higher side vis-a-vis the borrowings. Moreover, inadequate provisioning might also expose out some receivables.


Shankara Building Products: Updated Forensic Analysis

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sanstar-limited" target="_blank" data-smartkarma-citation="entities:43662:1" rel="noopener">Sanstar (SANSTAR123 IN)</a> is primarily focused in producing maize based specialty products and ingredient solutions in India. It currently occupies a market share of around 7.8%. </li>
<li>The company has shown good growth in the last two years; however, when it comes to accounting and forensic checks there are several grey areas/unique policies.</li>
<li>Examples: Revenues are stated gross of GST and are net of freight and brokerage costs. Classification of some of free reserves into revaluation reserve, Salaries paid to some senior personnel,etc.</li>
</ul>



Sanstar (SANSTAR123 IN) is primarily focused in producing maize based specialty products and ingredient solutions in India. It currently occupies a market share of around 7.8%. 
The company has shown good growth in the last two years; however, when it comes to accounting and forensic checks there are several grey areas/unique policies.
Examples: Revenues are stated gross of GST and are net of freight and brokerage costs. Classification of some of free reserves into revaluation reserve, Salaries paid to some senior personnel,etc.


Dixon Technologies India Ltd / Forensic Accounting

Dixon Technologies (India) Limited manufactures consumer durables, lighting products, and mobile phones. The Company offers LED TVs, washing machines, LED and CFL bulbs and tubelights, and downlighters, as well as provides repair and refurbishment services of set top boxes, mobile phones, and LED TV panels. Dixon Technologies operates in India.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dixon-technologies-india-ltd" target="_blank" data-smartkarma-citation="entities:25486:1" rel="noopener">Dixon Technologies India Ltd (DIXON IN)</a> growth is driven by mobile and EMS segment; majority of other businesses are muted in the last two years.  </li>
<li>The company is able to convert earnings to cash quickly but cash yield is close to zero.</li>
<li>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.</li>
</ul>



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.


Dixon Technologies- Forensic Analysis (Update)

Nitin is founder of Trudence Capital 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 news papers such as Wall Street Journal, Financial Times, Business Standard etc.