KAVERI SEED COMPANY - Repeat

I have recommended this company twice @ Rs.272/- and Rs.287/-.Currently it is quoting around Rs.300/-

Still I feels it is worth buy for long term investors ,hence earlier two write ups are re-produced below once again.
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KAVERI SEED COMPANY – is one of the very few pure

listed  Indian  companies from hybrid seed sector.

Others from this sector are JK Agrigenetics ,Rallis,and

Advanta . Apart from these  other listed firms are

affiliates of foreign players like,Monsanto, Bayer

..etc. Kaveri Seed is a well managed Secunderabad

based firm promoted by Mr.GV Bhaskar Rao in 1976.

Company has grown a lot after that and now it is one

of the largest hybrid seed producer from South

India .Its product portfolio include seeds of

Corn, Cotton, Sorghum, Pearl Millet ,rice ,sunflower

and a wide variety of vegetables.Company also producing

various types of micro nutrients, plant hormones ,

bio-stimulants for different crops.Kavari also

producing organic plant protector under the brand

name ‘FIRE’. Other than this, company has a lot of

organic products to enhance yield from crops.

Recently Kaveri started operations in its  state

of an art facility for cob drying, seed processing

and cold storage which established in its owned 

farmland of 29 Acres in Medak district of Andhra

Pradesh. It added Red gram, onion, mustard and wheat

to is portfolio recently . This pure Indian player has

a very energetic R & D wing and introducing new

verities which can give good result even in bad

conditions like draught. Now in southern states of India

like Tamilnadu,Andhra and Karnataka ,precision farming is

gaining momentum and it is experienced as a great success.

This method requires hybrid seeds and scientific methods

of farming which is expected to bring big business to Kaveri.

                        In the financial front ,Company

is growing steadily and posted a turnover of Rs. 169 Cr

and a net profit of Rs.29 Cr in last financial year.

EPS for FY 2010 is Rs.21.20/-. Backed by good monsoon

compared with last year ,Kaveri is expected to post even

better result in this year. Its business is seasonal

and 90% income generated in first qtr.Company has an

equity base of Rs.13.7 Cr and out of this 63% is held

by promoters and 26 % by big investors including mutual

funds .Even from a low floating stock, promoters are

again buying from open market. In nutshell, with a clean

and dedicated management and excellent R & D Wing Kaveri

Seed  is a company to reap the benefits which is expected

to emerge in Farming sector ,going forward.This one stop

company for hybrid seed ,organic fertilizer and organic

pesticide  is quoting around Rs.272/-

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I have received many queries from readers asking whether Kaveri Seed

Company is still a BUY after a  rise of RS.15/- from earlier

recommended price in just two days. Following are  some points

about the company :

 1)      The industry in which it operates have huge potential

        going forward

2)      There are only few listed players in this sector , and entry

      barrier is very high.

3)      Company having  a good ,aggressive and focussed management .

4)      It is growing steadily over past many years

5)       Its R & D is very strong  with 250 acres of land dedicated to

       R&D and  with State-of-the-art Bio-technology labs.

6)      Excluding promoter stake and shares held by large investors ,

      floating stock is just 10% of total equity

7)      Promoters bought shares in recent past from open market even

      at a price of Rs.290/-

8)  Kaveri is the cheapest stock available from this sector with

            a P/E of 13 (Monsanto - 28 ,Advanta 31 ,JK Agri in loss)
      9)  It is virtually a debt free company

     10)  Most importantly , Kaveri  is not a much publicized stock

            and many from investor  fraternity including analysts and
          

            business channels have  not celebrates it so far

The above are some of the points in favour of Kaveri Seed  ,

Considering the fact that its 90% income is coming from June

qtr alone and the result of this qtr is going to publish within few
days ,even at current price it is a

BUY and hold to grow with it  ,and not a stock to Buy today

and sell tomorrow or day after tomorrow. One negative

point is , Monsoon and  eather condition have great influence
in its business  and which can’t

be   controlled by anyone other than god.