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Bartronics: What's cooking?

A recent article by R. Balakrishnan at Money Life caught my attention. It’s about Bartronics, a share I recently traded.

Against total sales of around Rs. 64 crore in the full year, the year-end debtors stand at over Rs71 crore! And the balance sheet says that debtors’ outstanding for less than six months is Rs49 crore. Interestingly, by seeking its quarterly results for the full year, I find that in the last two quarters of the year, Bartronics had notched up sales of Rs35 crore. Against total sales of Rs35 crore in six months to March 07, the company’s debtors’ outstanding for less than six months is Rs49 crore. Funny arithmetic indeed!

I have verified from the Bartronics Annual Report (2006-07) that Balakrishnan is correct – they do have these numbers in their annual report. Simply put: They have said they “sold” 64 crores worth of goods, and the need to still receive 71 crores from their customers. More than a year’s turnover as receivable! That’s reeks of either government contracts (which Bartronics has) or something funny. No wonder operating cash flow is negative!

Balakrishnan perhaps saw a misprint because the capital allocation is quite clear in the link above. There are 8 lakh stock options, 46 lakh promoter warrants (at 130) and 32.5 lakh institutional warrants (at 110). A total of 87 lakh shares will be added to the current 1.78 crore, meaning real outstanding shares are considered to be 2.65 crore (or will be as of Dec 2008). That brings the EPS for the FY down to 5.54.

One other problem: They mention that they didn’t spend anything on R&D in the year, but also admit that they must do research in order to be competitive. Uhm.

The stock’s done well, and it’s been some fantastic momentum. I think management should answer these questions (I will mail them myself) – if not, this is a bubble stock. To its credit, there is a new smart card facility coming up. And the first Q 2007 results have been very good, up nearly 100% year on year. So while it doesn’t look overvalued to me, it’s not exactly cheap either.

But be careful, if you own this share. The financials don’t quite seem to add up.

  • Ankur says:

    >”A total of 87 lakh shares will be added to the current 1.78 lakh, “

    plz tell me there is a misprint.. because if it not.. then i am going to burn them at stake in blogs and in the market.

  • Deepak Shenoy says:

    >Ankur: Yes, was a misprint, sorry! Have fixed it now (current is 1.78 crore)

  • Ravi says:

    >Beware of Bartronics – Another Satyam in the making. Also the debt is huge; cash flows are almost zero – They are not getting paid for thier products.

    Bartronics india Limited, the companys fraudlent manipulation of the system should be studied by Harword university or IIM's and ISB's.

    The company being promoted by M/s. Sujana Group well know intellegent company in manupilation of funds with in the system.

    the modus operandi of the Bartronics is to inflate sales! better known as NOTIONAL SALES OR STRUCTURED SALES as mentioned by their whole time director Venkatesh Rao, which by the law of the land is legal for inflating turnover and for raising funds and share price riggng. The fraud committed is very very complex in nature, the group have 25 odd companies and one company bills the other and this goes on with cash flowing from one company to another

    Secondly the higly priced acquistions made which have resulted in loss making and good route to divert funds

    All investors be aware of these type of companies

  • Ravi says:

    >Their finance managers had conned many private investors to buy the stock at 220 levels and hold for year with a promise to take the share price to 400 to 450 levels,

    Again these finance managers are promising private investors to buy at current levels and hold on for a year promsing that the price will go to 300 to 370 levels Private investors be aware do not fall into the false promises

  • Anonymous says:

    >The promoters have royally screwed up this company with its unthical standards through systamatic money diversion,with debt to the tune of 600 crs. The company diverted funds by acquiring paper companies
    1. Point soft
    2. Info call
    3. SRG in US

    Bartronics has gained it reputation of taking loans and advances from all the major banks in the name of expansion

    most of the employees salary are shown in bartronics but actual work done for other group companies,

  • Anonymous says:

    >. The card needs to have the students information embedded in it so as to function as a multi-utility ID card / swipe card yes
    2. The card will be pre-loaded with ‘cash’ so as to be used as a pre-paid card in an emergency for a variety of services yes?
    3. The card readers and software will need to generate an MIS based report every time the card is swiped how?
    4. The card will also serve as a photo ID card yes
    5. At a later date as per government developments, the card will be ported to the national ID card database. In effect, this means there will come a time when a student joins school, they will be issued one card for life (similar to a PAN card) yes?
    6. The card will be recognized at various merchant establishments and will entitle the holder to multiple discounts and benefits yes
    7. Back-end software will need to be developed and maintained along with a database of students and ID cards to track usage (MIS) will Kyros maintain the backend, or will Kyros develop it and sell it to our company?
    8. Back-end software will need to be integrated with the website so as to allow the further integration of other convergence apps like SMS based services and GPRS services for mobile phones etc. in future yes? how?