'No one would like to hold Kouton until it shows improvement'

In a chat with ET Now, Avinash Gorakshekar, Head of Research, Anagram Capital Ltd., shares his views on the outlook of Koutons.

What is your call on Koutons?

As a house, we have not yet revised our call on the stock but from whatever information we have been getting on the company, it is a clear case where the company has been very badly hit by the working capital crunch. More importantly, we have been hearing that the promoters have pledged in almost 90% of their shares. Probably the management is now having a tough call to address its investors and reimpose confidence in the investment community because promoters who pledged more than 80-90% of their holdings, it is a very clear case that there is very little funding support for such kind of companies from other external investors. So, until they do not get their act together and the quarterly numbers do not show some sort of good traction on the top line as well as on the bottom line, it is a very clear case nobody would want to hold the baby. There have been lots of cases in the past like Vishal Megamart, which was also a very key player, which has now gone under because of cash flow problems.