Analysis: Wonder Electricals Ltd

The current section of the “Analysis” series covers Wonder Electricals Ltd, an Indian company that specializes in making fans (ceiling, pedestal and exhaust) for brands like Usha, Luminous, Surya etc. as well as for other regional players.

To benefit the maximum from this article, an investor should focus on the process of analysis instead of looking for good or bad aspects of the company. She should learn the interpretation of different types of data and transactions and pay attention to the parts of annual reports etc. used to get the information. This will help her in improving her stock analysis skills.

Wonder Electricals Ltd: Detailed Fundamental Analysis

Wonder Electricals Ltd does not have any subsidiaries or other child entities. Therefore, it reports only standalone financials.

We believe that while analyzing any company, an investor should always look at the company as a whole and focus on financials, which represent the business picture of the entire company including its subsidiaries, joint ventures etc. Consolidated financials of a company present such a picture. Therefore, if a company reports both standalone as well as consolidated financials, then in such a case, it is advised that the investor should prefer the analysis of the consolidated financials of the company, whenever they are present.

Further advised reading: Standalone vs Consolidated Financials: A Complete Guide

Therefore, in our analysis of Wonder Electricals Ltd, we have analysed standalone financials for the last 10 years (FY20115-FY2024).

Financial and Business Analysis of Wonder Electricals Ltd:

In the last 10 years, Wonder Electricals Ltd has increased its sales at an annual growth rate of 26% from ₹72 cr in FY2015 to ₹570 cr in FY2024. During the last twelve months i.e. July 2023-June 2024, the company increased its sales to ₹684 cr.

Over the last 10 years (FY2015-2024), Wonder Electricals Ltd’s operating profit margin (OPM) has fluctuated from 2% in FY2015 to 6% in FY2017 and then declined to 3% in FY2020. In the last four years, the company had an OPM of 4%.

The net profit margin (NPM) of the company has been equally volatile and the company reported losses in FY2015. Thereafter, its NPM increased to 3% in FY2017 and then declined to 1% in FY2020. Since then, its NPM has been stable at about 2%.

An investor also notices that Wonder Electricals Ltd is not able to enjoy any economies of scale benefits with increasing business size as from FY2018 to the last 12 months (July 2023-June 2024), the company has expanded its sales to more than double from ₹293 cr in FY2018 to ₹684 cr in last 12 months; however, during this period its OPM and NPM are at the same levels of 4% and 2% respectively.

To understand the reasons for such low margins and fluctuations in the business performance of Wonder Electricals Ltd over the years, an investor needs to read the publicly available documents of the company like annual reports, red herring prospectus (RHP) of its initial public offer (IPO) in 2019, credit rating reports by CRISIL, as well as its corporate announcements.

After going through the above-mentioned documents and article, an investor notices the following key factors, which influence the business of Wonder Electricals Ltd. An investor needs to keep these factors in mind when making predictions about the performance of Wonder Electricals Ltd.

1) Fragmented industry leading to intense price-based competition:

Indian fans industry is highly fragmented with numerous organized as well as unorganized players competing intensely to sell their products. In addition, as most of the fans serve the basic purpose of providing airflow in the room, it becomes difficult for fan manufacturers to have any strong pricing power.

As a result, fan manufacturers end up competing on price to attract customers, which leads to low-profit margins.

Credit rating report by CRISIL, January 2024, page 1:

Intense competition in the consumer durables sector in India: With the entry of several large players over the past few years, there has been significant price competition, which has adversely affected the operating profitability of most players.

At the time of its IPO, in 2019, Wonder Electricals Ltd highlighted to the investors, the fragmented nature of its industry. It also disclosed how it had to reduce the prices of its products and suffered on margins due to intense competition.

Red herring prospectus, July 2019, page 42:

The industry segments in which we operate being fragmented, we face competition from other players as well as from our customers…Competitive conditions in some of our segments have caused us to incur lower net selling prices and reduced gross margins and net earnings.

Also read: How to do Business Analysis of a Company

2) Other factors leading to the low pricing power of Wonder Electricals Ltd:

Other than the intense competition, there are a few other factors that lead to low profit margins (OPM of about 4% and NPM of about 2%) of the company.

2.1) Concentrated customer base of larger companies:

The main business of Wonder Electricals Ltd is to supply fans to original equipment manufacturers (OEMs) like Usha, Luminous, Surya Roshni Etc.

Credit rating report by CRISIL, March 2018, page 1:

manufactures on contract basis for renowned brands such as Usha International Ltd, Surya Roshni Ltd, and Luminous Power Technologies Pvt Ltd

These customers are much larger than Wonder Electricals Ltd and to ensure the stability of their supplies, they keep multiple suppliers with whom they can play against one another to get the best pricing. As a result, Wonder Electricals Ltd like any other supplier to big OEMs faces very low pricing power.

Credit rating report by CRISIL, March 2018, page 1:

Customer concentration in revenue: Majority of its revenue comes from Usha International Ltd, restricting bargaining power.

In such business arrangements where companies make goods for large consumer brands, companies are assured of a reasonably stable demand for their products as orders from OEMs; however, their margins are low. Nevertheless, OEMs assure them stable margins and offer to compensate for changes in raw material prices.

Red herring prospectus, July 2019, page 135:

Under our OEM business model, the raw material specifications are given by the customers and in some cases the suppliers from whom the raw materials are to be purchased are also identified by the customers. Any volatility in prices of such raw materials does not affect our profitability as the contract with the customer states these parameters, on the basis of which the raw material cost is a pass- through item for us.

In such arrangements, the company receives a fixed conversion cost for producing fans. Due to assured profit margins, OEMs negotiate hard with the suppliers and enter into contracts at the lowest possible profit margins.

Red herring prospectus, July 2019, page 135:

The conversion cost is agreed upon prior to placing of orders as the cost sheet is shared with the customers. Conversion cost is the entire value-add provided by us for converting the raw material into finished goods till the final dispatch to the customer.

Other players who build consumer durable/white goods for OEMs face similar pricing pressure leading to stable demand but low margins. An investor may read our analysis of Amber Enterprises India Ltd, which is India’s largest contract manufacturer of fully built air conditioner (AC) units as well as components of AC and other white goods like refrigerators, washing machines etc.

Amber Enterprises India Ltd also faces a similar business environment of stable demand but low profit margins: Analysis: Amber Enterprises India Ltd

2.2) No patents, no brand, no technical collaborations by Wonder Electricals Ltd:

The company does not own any patents or brands or any technical collaborations with any players who can help it create technologically superior products than its competitors.

Red herring prospectus, July 2019, pages 31, 125 and 137:

We do not hold any patents or other form of intellectual property protection in relation to our manufacturing processes

WEAKNESSES: – No owned brand

Company has so far not entered into any technical or financial collaboration agreement.

Therefore, the company does not have any such product, which its competitors do not possess. As a result, the company simply makes products, which are prevalent in the market and all other competitors also produce them.

As a result, the company loses negotiating power over its customers.

3) Strategies employed by Wonder Electricals Ltd to strengthen its business model:

Over the years, the company has taken different decisions to improve its business model. Let us see a few such steps.

3.1) Original Design Manufacturing (ODM) business model:

As the OEM business segment of Wonder Electricals Ltd does not generate high profit margins; therefore, the company has attempted to cater to local/regional as well as private label fan players by starting the Original Design Manufacturing (ODM) segment.

Red herring prospectus, July 2019, page 124:

Gradually, we believe there is a trend in certain product verticals wherein regional and private labels have been gaining market share and the ODM model allows us to service this market as well.

Unlike the OEM segment where the company has to work on very low-profit margins, in the ODM segment, it is able to earn a higher margin; however, it comes at an additional risk where it has to undertake the raw material price risk, unlike the OEM segment where the OEM player undertakes the raw material price risk.

Red herring prospectus, July 2019, pages 42, 135:

ODM model of business requires additional investment in R&D as well as working capital but provides higher margins as compared to the OEM model.

Under our ODM business model, raw material procurement is directly carried out by us. We manage the supply chain of raw materials and components…We monitor raw material price trend in international markets, freight rate and transit time.

Most of the raw materials consumed by Wonder Electricals Ltd in fan production are commodities like aluminium, steel, copper, plastic/packaging material etc. Prices of all these goods are cyclical in nature and witness sharp fluctuations.

As a result of low pricing power due to intense competition and commoditized products, the company is not able to pass on an increase in its input costs to its customers, especially in the ODM segment leading to a hit on its profit margins. The fact that Wonder Electricals Ltd does not enter into long-term supply contracts for its raw material purchases also increases the risk to its profit margins.

Red herring prospectus, July 2019, page 136:

We typically do not enter into long-term contracts with our suppliers for purchase of input components.

FY2023 annual report, page 135:

During the year due to fluctuation in Raw Material Rates, there was impact on Profitability.

Also read: How to analyse New Companies in Unknown Industries?

3.2) Backward integration and flexible manufacturing plants:

To improve its profit margins, Wonder Electricals Ltd has tried to cover as many steps of the fan manufacturing process in-house as possible so that it can capture a higher value of the supply chain.

Red herring prospectus, July 2019, pages 17-18:

we have done backward integration of our major manufacturing processes by developing in-house capabilities for blade fabrication, cover & rotor machining on automatic CNC machines, copper winding of stators, sanding, buffing, pre-treatment using nano technology, powder coating on a fully conveyorized & automatic paint-shop using robotic arm reciprocators, liquid painting for high end metallic finishes on a fully conveyorized, semi-automatic paint-shop and assembly.

Additionally, the company has created flexible manufacturing plants in which it can produce different products as per the requirements of customers.

Red herring prospectus, July 2019, page 100:

We maintain the flexibility of our manufacturing facilities by measures such as multiple-function training and standardization of equipment.

3.3) Expanding the product range and markets:

Wonder Electricals Ltd has also tried to enter into new products like heaters, ventilating fans, kettles etc. to diversify its business and reduce the dependence on a single product category of fans (Investors’ presentation, August, 2024, page 5).

In the past, the company also tried to explore export markets for its fans thinking that overseas markets may provide it with better profit margins.

FY2019 annual report, page 8:

Company is focusing on overseas market for its products. Company is expecting better margins in export sales.

However, it seems that its export initiatives did not result in any outcome as, in FY2024, the company had nil forex income.

FY2024 annual report, page 115:

Going ahead, an investor should keep a close watch on the status of its contracts with OEMs and its profit margins to assess whether it is able to maintain its relevance to its large customers or the OEMs have started inhouse fan production or it is losing pricing power further due to competition. She should track the progress of its new initiatives like new products to check whether it is able to reduce its reliance on a single product category of fans.

In the last 10 years (FY2015-2024), the tax payout ratio of Wonder Electricals Ltd has been different than the standard corporate tax rate in India for the initial period up to FY2019.

During this period, the tax payout ratio of the company was low primarily due to depreciation benefits and tax-exempted income.

Red herring prospectus, July 2019, page 196:

Recommended reading: How to do Financial Analysis of a Company

Operating Efficiency Analysis of Wonder Electricals Ltd:

a) Net fixed asset turnover (NFAT) of Wonder Electricals Ltd:

Over the years, the net fixed asset turnover (NFAT) of Wonder Electricals Ltd has been in the range of 10-12. The NFAT declined from almost 20 in FY2018 to 10.6 in FY2021 due to the operationalization of a new fan manufacturing unit in Hyderabad, which took some time for optimal utilization; thereby, impacting asset utilization efficiency in the meanwhile.

Going ahead, an investor should keep a close watch on the fixed asset turnover levels of the company to assess whether it is able to optimally utilize its production capacity.

Further advised reading: Asset Turnover Ratio: A Complete Guide for Investors

b) Inventory turnover ratio of Wonder Electricals Ltd:

Over the years (FY2015-2024), the inventory turnover ratio (ITR) of the company has been in the range of 11-12. However, in the interim period, the ITR has seen significant variations like during FY2018 to FY2021, the ITR of the company declined from 24.9 to 10.0.

Nevertheless, since then, a stable ITR of 11-12 indicates that the company is maintaining its inventory utilization efficiency.

Going ahead, an investor should keep a close watch on the inventory position of the company to understand whether it is able to maintain its efficiency of its efficiency of inventory utilization.

Further advised reading: Inventory Turnover Ratio: A Complete Guide

c) Analysis of receivables days of Wonder Electricals Ltd:

Over the years, the receivables days of Wonder Electricals Ltd have deteriorated significantly from 59 days in FY2016 to 121 days in FY2024. Its receivables days indicate that it takes almost 4 months for the company to collect money from its customers for the goods supplied by it.

Such delays in collecting money indicate that the company lack a high negotiating power over its customers and in turn, has to bear the cost of raising money from the bank to meet its funds’ requirements in the interim period making its business highly working-capital intensive.

Credit rating report by CRISIL, January 2024, page 1:

Its large working capital requirements arise from its high debtor levels. The company is required to provide extended credit to its customers.

Wonder Electricals Ltd highlighted its tough working capital position to investors in its RHP for IPO. It mentioned that to grow its business, it would have to give a higher credit period to its customers; however, it will not get a higher credit period from its suppliers. In effect, it would be squeezed between the high negotiating pressure from both its customers as well as its suppliers.

Red herring prospectus, July 2019, page 94:

we are required to provide sufficient credit period to our clients resulting in high receivables and we enjoy minimum credit from our suppliers through against the same. We intend to increase our turnover over the years for which we would be required to provide extended credit period to our customers, but the credit period that we avail from our suppliers shall not increase substantially.

In the RHP, Wonder Electricals Ltd disclosed that for its upcoming plant in Hyderabad, more than 50% of the overall project cost (i.e. ₹16 cr out of the total cost of ₹30 cr) would be the additional working capital required to serve its customers, indicating the highly working capital-intensive nature of its business.

Red herring prospectus, July 2019, page 88:

Going ahead, an investor should continue to monitor the receivables position of the company to check if it is able to improve its cash collection from its customers or if it continues to suffer from a very high working capital burden.

Further advised reading: Receivable Days: A Complete Guide

When an investor compares the cumulative net profit after tax (cPAT) and cumulative cash flow from operations (cCFO) of Wonder Electricals Ltd for FY2015-2024, then she notices that over the last 10 years (FY2015-FY2024), the company could not convert its profit into cash flow from operations.

Over FY2015-2024, Wonder Electricals Ltd reported a total net profit after tax (cPAT) of ₹51 cr. During the same period, it reported cumulative cash flow from operations (cCFO) of only ₹2 cr.

It is advised that investors should read the article on CFO calculation, which would help them understand the situations in which companies tend to have the CFO lower than their PAT.

Further advised reading: Understanding Cash Flow from Operations (CFO)

The major reason for cCFO being lower than cPAT is its working capital-intensive business model where a huge amount of money gets stuck in trade receivables. Over FY2015-FY2024, Wonder Electricals Ltd saw a substantial amount of ₹204 cr consumed by receivables as its debtors/trade receivables increased from ₹17 cr in FY2015 to ₹221 cr in FY2024.

Going ahead, an investor should keep a close watch on the cash flow performance of the company to monitor if it is able to convert its profits into cash flows.

The Margin of Safety in the Business of Wonder Electricals Ltd:

a) Self-Sustainable Growth Rate (SSGR):

Read: Self Sustainable Growth Rate: a measure of Inherent Growth Potential of a Company

Upon reading the SSGR article, an investor would appreciate that if a company is growing at a rate equal to or less than the SSGR and it can convert its profits into cash flow from operations, then it would be able to fund its growth from its internal resources without the need of external sources of funds.

Conversely, if any company attempts to grow its sales at a rate higher than its SSGR, then its internal resources would not be sufficient to fund its growth aspirations. As a result, the company would have to rely on additional sources of funds like debt or equity dilution to meet the cash requirements to generate its target growth.

An investor may calculate the SSGR using the following formula:

SSGR = NFAT * NPM * (1-DPR) – Dep

Where,

• SSGR = Self Sustainable Growth Rate in %
• Dep = Depreciation rate as a % of net fixed assets
• NFAT = Net fixed asset turnover (Sales/average net fixed assets over the year)
• NPM = Net profit margin as % of sales
• DPR = Dividend paid as % of net profit after tax

(For systematic algebraic calculation of SSGR formula: Click Here)

From FY2018-FY2024, Wonder Electricals Ltd had a very fluctuating SSGR ranging from 5% to 29%. However, since FY2022 when its Hyderabad plant became operational, its SSGR is only about 4-5% whereas it has grown its sales at an annualized rate of 26% year on year (FY2015-FY2024)

As a result, the company could not meet its funds’ requirements from its internal/business cash flows and had to rely on external funds both from debt as well as equity dilution to meet its cash shortfall.

Over the last 10 years (FY2015-FY2024), it raised an incremental debt of about ₹68 cr as its total debt increased from ₹17 cr in FY2015 to ₹85 cr in FY2024. In addition, it also raised about ₹20 cr via equity dilution (IPO) in July 2019.

An investor arrives at the same conclusion when she analyses the free cash flow position of the company.

b) Free Cash Flow (FCF) Analysis of Wonder Electricals Ltd:

While looking at the cash flow performance of Wonder Electricals Ltd for the last 10 years (FY2015-FY2024), an investor notices that it generated cash flow from operations of ₹2 cr. During the same period, it made a capital expenditure of about ₹73 cr.

Therefore, during this period (FY2015-FY2024), Wonder Electricals Ltd had a negative free cash flow (FCF) of (₹71) cr (=2 – 73).

In addition, during this period, the company had a non-operating income of ₹2 cr and an interest expense of ₹21 cr. As a result, the company had a total negative free cash flow of (₹90) cr (= -71 + 2 – 21). Please note that the capitalized interest is already factored in as a part of the capex deducted earlier.

To meet this cash shortfall of ₹90 cr, Wonder Electricals Ltd raised debt of about ₹68 cr and equity dilution (IPO) of about ₹20 cr.

Going ahead, an investor should keep a close watch on the free cash flow generation by Wonder Electricals Ltd to understand whether the company continues to generate surplus cash from its business and how it utilizes it.

Further recommended reading: Free Cash Flow: A Complete Guide to Understanding FCF

Self-Sustainable Growth Rate (SSGR) and free cash flow (FCF) are the main pillars of assessing the margin of safety in the business model of any company.

Further advised reading: 3 Simple Ways to Assess “Margin of Safety”: The Cornerstone of Stock Investing

Additional aspects of Wonder Electricals Ltd:

On analysing Wonder Electricals Ltd and after reading annual reports, its credit rating reports and other public documents, an investor comes across certain other aspects of the company, which are important for any investor to know while making an investment decision.

1) Management succession planning of Wonder Electricals Ltd:

The company is promoted by Anand and Sahni families. Currently, the senior generation promoters Mr Harsh Kumar Anand (Chairman, aged 74 years), Mr Yogesh Sahni (MD, aged 66 years) and Mr Yogesh Anand (CFO, aged 70 years) are leading the company.

In addition, from the next generation, the sons of each of the promoters, Mr Karan Anand s/o Mr Harsh Kumar Anand (aged 40 years), Mr Jatin Anand s/o Mr Yogesh Anand (aged 41 years) and Mr Siddhant Sahni s/o Mr Yogesh Sahni (aged 36 years) are working as whole-time directors for the company.

The presence of the next generation of the promoter family in the executive leadership positions in the company when the elder generation of promoters is still on the board indicates good succession planning as the younger ones can get hands-on experience and guidance.

The presence of a well-thought-out management succession plan is essential in the case of promoter-run businesses as it provides for a smooth transition of leadership over the generations and provides continuity in the business operations of any company.

Further advised reading: How to do Management Analysis of Companies?

2) Related party transactions of Wonder Electricals Ltd with promoters:

Over the years, the company has entered into many transactions with promoter-owned entities. In the RHP at the time of IPO, the company highlighted the risk that its promoters have multiple companies in the same line of business and at times, they may prefer their companies over Wonder Electricals Ltd, which might be detrimental to the interest of minority shareholders.

Red herring prospectus, July 2019, page 29:

Our Promoter Group Entities namely…Stamping & More LLP…Uttranchal Industries, Quality Components…carry out business similar to that of our Company. As a result, conflicts of interests may arise in allocating business opportunities amongst our Company and our Group Entities…In cases of conflict, our Promoters may favour other companies in which our Promoters have interests

2.1) Acquisition of Uttaranchal Industries:

In FY2024, Wonder Electricals Ltd acquired a promoter-owned entity, Uttaranchal Industries (UI) for a sum of ₹23.42 cr by issuing preference shares with a 5% coupon.

FY2024 annual report, page 44:

Company has acquired/purchase the manufacturing business of Uttaranchal industries…in lieu of issuance of unlisted 23,42,665 5% NCRPS (Non-Convertible Redeemable Preference Shares) of nominal value of Rs. 100/- each aggregating Rs. 23,42,66,500/-

For the payment of ₹23.42 cr, the company received net assets of only ₹8.24 cr because the company recognized ₹15.18 cr as goodwill.

FY2024 annual report, page 91:

The company has acquired electrical fan manufacturing business of M/s Uttaranchal Industries…company has booked Goodwill of Rs. 15,18,67,943/-

An investor may do her own assessment to understand whether a sum of ₹23.42 cr for the acquisition of assets worth ₹8.24 cr was justified because the human/intellectual/proprietary capital owned by UI is also owned by Wonder Electricals Ltd as well because the same promoters are running both the companies.

An investor should be very cautious while assessing transactions between any publicly listed company and its promoters because such transactions carry the risk of shifting economic benefits from minority shareholders to the promoters. This is true if in any of such transactions, any good or service is purchased by promoters from the company at a price lower than its fair/market value or it is sold by promoters to the company at a price higher than its fair/market value.

Also read: How Promoters benefit from Related Party Transactions

2.2) Purchase of goods from promoter-owned entities:

Almost every year, Wonder Electricals Ltd purchases goods worth significant money from promoter-owned entities.

For example, in FY2024, it purchased goods for about ₹54 cr from promoter-owned entity, Stamping & More LLP and about ₹15 cr from Quality Components.

FY2024 annual report, page 129:

As discussed above, such transactions carry the risk of shifting economic benefits from minority shareholders to the promoters if these goods are purchased by the company from the promoter entities at a price higher than its fair/market value.

Therefore, an investor should due deeper due diligence on such transactions.

Going ahead, an investor should keep a close watch on the transactions between the company and its promoters.

3) Remuneration of promoters:

Wonder Electricals Ltd had taken approval from shareholders to pay remuneration to promoters, which is much higher than the otherwise available statutory limits. The company sought approval to pay up to 40% of net profits as remuneration to promoters instead of the statutory limit of 11%.

FY2020 annual report, page 2:

increase the overall limit of managerial remuneration payable by the Company in respect of any Financial Year…from 11% (Eleven percent) to 40% (Forty percent) of the net profits of the Company

An investor should assess the remuneration paid by any company to its promoters in light of the business performance of the company under their leadership. This is because a higher remuneration may not be justified if the company’s performance is not great.

Also read: How to identify Promoters extracting Money via High Salaries

The Margin of Safety in the Market Price of Wonder Electricals Ltd:

Currently (October 4, 2024), Wonder Electricals Ltd is available at a price-to-earnings (PE) ratio of about 163 based on earnings of the last 12 months (July 2023-June 2024).

Moreover, we recommend that an investor read the following articles to assess the PE ratio to be paid for any stock, which takes into account the strength of the business model of the company as well. The strength in the business model of any company is measured by way of its self-sustainable growth rate and the free cash flow generating the ability of the company.

In the absence of any strength in the business model of the company, even a low PE ratio of the company’s stock may be sign of a value trap where instead of being a bargain; the low valuation of the stock price may represent the poor business dynamics of the company.

• 4 Principles to Decide the Ideal P/E Ratio of a Stock for Value Investors
• How to Earn High Returns at Low Risk – Invest in Low P/E Stocks
• Hidden Risk of Investing in High P/E Stocks

Analysis Summary

Over the years, Wonder Electricals Ltd has increased its sales at a very fast pace; however, it has experienced fluctuating operating profit margins (OPM) and net profit margins (NPM). Despite an increase in sales, the profit margins have remained low and there are no benefits from economies of scale.

One of the key reasons for low-profit margins is the highly fragmented industry structure, leading to intense price-based competition as the company has to reduce prices to attract customers.

The company supplies fans to large OEMs like Usha, Luminous, and Surya Roshni. These large customers have significant bargaining power, leading to low pricing power for Wonder Electricals Ltd. The company also lacks patents, brands, or technical collaborations, further weakening its negotiating position.

Wonder Electricals Ltd has high receivables days, indicating delays in collecting payments from customers. This results in a working capital-intensive business model, where a significant amount of money is tied up in trade receivables.

Over the last 10 years, the company has generated negative free cash flow due to high capital expenditure and low cash flow from operations. This has led to reliance on external funds, including debt and equity dilution, to meet cash shortfalls.

The company has entered into numerous transactions with promoter-owned entities like acquiring a promoter-owned entity as well as purchasing large amounts of goods from other entities. Such transactions raise concerns about potential conflicts of interest and the risk of shifting economic benefits from minority shareholders to promoters.

The company has got approval to pay promoters a remuneration significantly higher than statutory limits, which may not be justified given the company’s financial performance.

Investors should closely monitor these factors and conduct their own analysis before making any investment decisions regarding Wonder Electricals Ltd.

Further advised reading: How to Monitor Stocks in your Portfolio

These are our views on Wonder Electricals Ltd. However, investors should do their own analysis before making any investment-related decisions about the company.

You may use the following steps to analyse the company: “Selecting Top Stocks to Buy – A Step by Step Process of Finding Multibagger Stocks”

I hope it helps!

Regards,

Dr Vijay Malik

P.S.

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Disclaimer

Registration status with SEBI:

I am registered with SEBI as a research analyst.

Details of financial interest in the Subject Company:

I do not own stocks of the companies mentioned above in my portfolio at the date of writing this article.