FDC Limited - Silence might be Golden !

Over the last few years as the equity cult has risen, managements have started understanding the importance of engaging with investors. In the last 5 years the number of result conference calls, press release & investor presentations have increased manifold. A dedicated investor relations officer is common who updates both the marquee investors & sell side about the developments in the company.

Only a handful of companies are such that are ethical, compliant & with strong business models yet somehow refrain from engaging with investors in any form. Torrent Power was in that mode a few years ago thus besides the AGM it was almost impossible to catch hold of the management. Fortunately the sector is such that plenty of details are in public domain & the management did have a press release/ presentation post results. Even then it was an uphill task to analyze the company & I still feel it is under researched. As the baton passed to the younger generation, the engagement levels have gone up.

Another such company that we have come across recently is FDC Limited. I happened to present on that company at a forum in Kolkata. The link to the presentation is here - FDC Presentation. In such cases one has to rely tremendously on fringe data & make an estimate :-

1) Vendors & suppliers are a good source of information on management practices, payment terms, timelines & even approach to technology. Online vendors are very insightful on product extensions & competition.

2) Competitors are a good source of information on the tailwind a product/ category is enjoying. 

3) Independent sites/agencies offer details on the potential opportunity. Incase of pharma a site like pharma compass or any agency sharing data on import/ export is beneficial. 

4) Besides the Director's report & Management discussion the Energy Conservation report in annual reports often gives an indication on the specific changes done in plant & machinery. They even quantify the increase in production, savings in power & manpower. 

5) Old research reports & presentation are very useful in terms of comparing the forecasts & how far the company has made it. Plus data points on various products, its life cycle, growth trajectory from older reports can be insightful of the present situation also. 

6) Often hires outside the board level is not mentioned in any company disclosure. Linkedin is a good source to track the change in HR that a company is undergoing & if any significant hires are made one can observe the background. 

7) Often one googles about the corporate entity but to expand that search about the products/ brands /key management personnel can be insightful. Occasionally one discovers an interview or two which discusses what the management is working upon. 

8) Websites like Zauba will help you see the various directorships held/ associate companies/ family members & offer some insights into the credit profile as well. 

9) Reports from credit rating agencies are a great source of information. 

Hope this might help one research a company which shares limited data a tad better. If we notice a company engaging frequently with investors or attending every conference, one has an uneasy feeling especially if they have an unquenchable thirst for capital. Seeing a Repco Housing in every conference does make one wonder on maybe there being some ulterior motive. On the other hand a promoter not seeking capital might be reclusive & focused. He keeps noise & 'nosy' advisers at bay - his Silence might be Golden !