Internal vs External Risks

Internal risks are within the company's control (e.g., pending litigation), while external risks are market-wide (e.g., raw material price hikes).

Key Litigation Checks

Look for criminal proceedings against promoters or material tax litigations that exceed 50% of the company's profit. These are major red flags.

Revenue Concentration

If a company gets 80% of its revenue from just 2 or 3 clients, losing one client could collapse the business. Check the "Customer Concentration" risk carefully.