External Factors vs. Bad Execution: Don't Blame Everything On The Market!

[00:00:00]Each of those instances, including right now where we are, this has been driven more by the external environment factors, not as much because of the promoters inability to execute.

[00:00:11]>> How do you know that? I mean, how do you decide that?

[00:00:13]>> Well, that's probably I would say that's where the understanding of the business comes in.

[00:00:19]So, in case of Shakti, for example, right now, last two quarters, Shakti got embroiled in the receivable cycles.

[00:00:27]So, market looked at classical of any B2G business, the thought was that here is another B2G business which will get sucked into on receivables. And the numbers were large. I mean, Shakti in December quarter, they reported almost about 1,700 crores of receivable, which was huge.

[00:00:45]We knew that this is not a business segment where the receivables get stuck.

[00:00:49]One, because money is put into escrow upfront before the orders are released to the companies.

[00:00:56]Two, because here this was not a case of a new allocation required from the budget.

[00:01:03]Because the way the scheme is designed, whatever subsidies state governments are otherwise offering, that subsidy money is just being rerouted for the solar pump category. So, it's no incremental burden.

[00:01:16]Third, because there's a direct commercial interest of for the government. It's a direct P&L impact because you're spending close about 1.5 lakh rupee every farm connection every year in revenue. As against that, you end up giving the same amount in subsidy, and you free up your cash flows for the next 15-20 years.

[00:01:36]So, we know we knew that, you know, money doesn't get stuck in this case.