CREDIT SERIES-7- Look beyond the good numbers

This company has been consistently delivering excellent performance for the last 5 years inspite of challenging business environment with multiple business events including the crude movement on which its prices are dependent. Increasing sales YOY, margins remaining stable and leverage ratios well within the acceptable levels.

Further on one side rating has been upgraded but at same time promoters pledge was increasing.

credit 7

Closer look revealed that although borrowing is increasing with sales growth but some lenders moved out YOY. On discussion with those lenders it came up that business numbers and actual numbers don’t really match and not sustainable long term.



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