Emmsons International is in the business of trading rice, wheat and other commodities. The company reported consistent growth in trading revenues and profits. It reported operating profits about 50cr on revenues of about 1,350cr in the last financial year. It operated with a relatively high debt load of 140cr. The business, however, generates weak operating cash flows as a result of heavy investment in its working capital. The business is exposed to the risks of commodity price rises, adverse government regulations on exports/imports, and adverse movements in foreign exchange – all of which directly impact its profits.
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