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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