Weak Cash ConversionSharp negative free cash flow growth and a low OCF-to-net-income ratio indicate difficulty converting accounting profits into cash. Over months, weak cash conversion limits self-funding of growth, increases reliance on external financing, and constrains flexibility for capex or working-capital demands.
Declining Net ProfitabilityA falling net margin (now 9.3%) despite improving gross margin points to rising operating or overhead pressure. Structurally lower net profitability reduces retained earnings available for reinvestment, weakens shock absorption, and makes long-term returns more sensitive to cost or demand shocks.
Small Scale And Sector CyclicalityA very small workforce (27 employees) and exposure to the cyclical auto-parts sector suggest limited scale versus large OEM suppliers. This can constrain capacity to win large contracts, reduce bargaining power, and increase vulnerability to auto demand swings, affecting durable competitive positioning.