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Choking the Engine

A list of companies that are doing well on a standalone basis, but not when evaluated with their subsidiaries…

Just like a car requires all its four tyres to be in a good shape for a smooth ride, a holding company too needs all its subsidiaries in sound financial health to present robust numbers. Such subsidiaries are created either with the purpose of business expansion or due to the very nature of the business. So, when a company is evaluated it should be on the basis of all group companies where it has controlling stakes. But, as is being noticed, most information sources reveal only the standalone financials; hence it is often that investors ignore the consolidated figures, which, instead, should be the basis of evaluating a company.

We have come up with a list of companies that are performing quite well if considered on standalone basis but their fortunes change dramatically when the consolidated business is taken into account. The losses posted by these subsidiaries play havoc with the numbers and, sometimes, plunge the whole group into losses. Let us examine such companies and analyse what went wrong with which of their subsidiaries.






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