TCI Express was established in 1996 as one of the foremost divisions of Transport Corporation of India (TCI). TCI Express started its independent operations on April 1, 2016, in-line with TCIL’s strategy of demerging the XPS division into a separate business entity.
Annual Report Review – FY19-20
Disclaimer: This is not a recommendation to Buy-Sell-Hold. This post is just for an educational purpose.
The tenth part of Series “Once a darling, now an evil”. This series is based on the companies which were once upon a time darling of the market and now, it has wiped out the majority of all those gains. I am trying to put some of the number-crunching facts by which we have identified ongoing issues in the companies and have saved our wealth.
I am starting this part with one of a jewelry company that has an all-time high price of ~Rs.649 in 2013 and now last traded price at Rs.1.05.
In the first instance this company having huge sales and profit growth. This creates a temptation to buy with missing out of the opportunity. But after the series of articles, we know to not get tempted with sales & PAT growth.
So, we go deeper ….
Huge debtor days, Debt/equity increasing so RoE% is due to the higher leverage.
I would like to go further detail of it.
If we look at the common size balance sheet then the majority part of the assets side was other assets that have receivables & inventories. Also, cash getting reduces and borrowings getting higher. Also, when a company growing at a higher rate then what is the need for higher borrowings after using good cash balance?
The company got debt at a lower rate. Curious and that is also at the time of higher interest rate. Also, the company has to pay lower taxes. Wow… lower interest rate and lower taxes.
The company has FCCB which is a more dangerous kind of foreign debt.
Negative CFO in two years and also if we compare cumulative CFO with cumulative PAT then CCFO<CPAT.
The company owns ~39 subsidiaries and associates companies which can be suspicious.
Company has given ~Rs.1400+ cr of loan and advances to subsidiaries companies on interest-free basis and repayment is beyond seven years.
Disclosure – Companies mentioned in the article are just for an example & educational purpose. It is not a buy/sell/ hold recommendation.
This series contains learning from books – Financial Shenanigans Quality of Earnings The Financial Numbers Game Creative Cash Flow ReportingCrompton Greaves Consumer Electricals Ltd. manufactures and markets a wide spectrum of consumer products ranging from fans, light sources and luminaires, pumps, and household appliances, such as geysers, mixer grinders, toasters, and irons. Crompton has been the market leader in fans, domestic pumps, and street lighting for over 20+ years. It has manufacturing locations in Goa, Vadodara, Ahmednagar, and Baddi. Crompton products are available in nearly 150,000 retail points across the country.
Annual Report Review FY19-20, FY18-19, FY17-18
Disclaimer: This is not a recommendation to Buy-Sell-Hold. This post is just for an educational purpose.
We have seen in the previous chapter that many of us working for the others and lastly that would keep us into the financial struggle. We consider many things as an asset such as a car, wristwatch, expensive products, smartphone etc. But does it have the same value when we going for sold?
Though we are doing a job we need to build an asset which has a real value. This act only can help us to become rich.
When we earn during our job, we need to focus on buying an asset rather than spending money on luxury items. Rich spend last on luxury items but poor spend it on first. These luxury items will create an impression of a rich person but actually, we stuck into the more debt trapped. We should focus on not to look rich, but to be rich. We need to understand the difference between looking rich and being rich. Looking rich is easy nowadays and anyone can look rich but being rich is difficult. We have to control our emotions, saved ourselves from social traps, not falling into the debt trap, etc. We need to make an arrangement that our assets earn for us and we buy luxury from that income rather buy it on the credit. Credit help us to fulfil our temptation immediately but using that we cannot put our step forward to being rich.
Poor and middle-class people suggest that rich people should get punished through tax but actually, middle-class people get highly punished through taxes. They try to look rich and buy an asset which does not have real value so that they have to pay a tax when they acquire depreciating assets. And rich people buy appreciating assets which don’t have higher taxation compared to depreciating assets and also earn income from it.
Disclosure – Companies mentioned in the article are just for an example & educational purpose. It is not a buy/sell/ hold recommendation.
Read for more detail: Rich Dad Poor Dad: What the Rich Teach their Kids About Money that the Poor and Middle Class Do Not!