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Sicagen


Sicagen is a trading outfit based out of Chennai.

It is primarily engaged in trading commercial vehicles and construction materials.  It is a distributor for Tata Motors.

It reported marginal operating profits on growing revenues over the last five years – reporting over 25cr in operating profits on revenues of 900cr in the year ended 31st March, 2012.  It operated with a moderate debt load relative to its current assets as at that date.

The company reported 38cr in market value of quoted investments as at 2011 year-end – this would be lower as at 2012 year-end but not by too much.

The reported assets on the balance sheet are largely comprised of sundry receivables and other loans and advances – their recoverability is unknown from publicly available information.

The business is totally dependent on the interest-rate environment – being adversely exposed to high interest rates, crimping demand for its products.

It is also impacted by the cyclical factors from the supply side – including those affecting the steel industry. 

Government regulations on fuel, duties, and taxes play a large role in impacting demand for the company’s automobiles.

Being a trading outfit, the company is exposed to significant competition resulting in low profit margins.  Entry of new players could put the existing margins at risk.

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