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Showing posts with the label non-compliance

Alphageo

Alphageo is in the business of executing seismic surveys for oil exploration majors such as ONGC, Essar etc. The company has reported reasonably stable revenues and operating profits over the last five years except for a dip in profitability in the last financial year as well as last quarter.   It operated average operating profits of about 30cr in the last five years on revenues of about 75cr.   It employed no net debt as at 31 st March, 2011. The business is subject to risks of international competition from reputed players, crude oil price drops, technological obsolescence, manpower retention, government policies on oil exploration, highly lumpy revenues including periods of significant revenue and earnings downturns in lean times, cost underestimation on long-term projects, legal risks of non-compliance with laws and regulations, etc.

Vikas WSP

Vikas WSP is in the business of producing guar gum powder, which is used primarily in food products and also for oil drilling activities.   It claims to be the leading producer of guar gum polymers in the world with customers such as Nestle, Mars, Heinz, Sara Lee, Unilever and CSM. The company has shown consistent growth in profitability and revenues over the years with 145 crores in operating profits on 550 crores in revenues in the last 12 months.  It also sports modest debt on its balance sheet. It hasn’t, however, generated free cash flows (operating cash flows – investing cash flows) over the last seven years due to excessive capital expenditure and expansion programmes.  This has been financed by debt financing and a particularly large preferential allotment of equity to promoters in 2008. The business is subject to risks of inadequate monsoon and water supply for the principal raw material (guar).  It is also exposed to risks of adverse regulatory changes in the food and