Saturday, November 6, 2010

AGRO TECH FOODS - A NEW DAWN ?

 




Agro tech Foods is a  subsidiary of  one of the world’s largest , US food major ConAgra Foods .
This company was originally promoted by  Mr C N Balu in 1986 and started operations in Karnool Dt of Andhra Pradesh.In the earlier stages,company’s business was limited only in the processing of edible oil ,mainly sunflower. Company had a marketing alliance with ITC and  its products were sold  mainly in the brand name of ‘Sundrop’ .Later ITC took equity participation in this company and its name changed to ITC Agro. In 1997 ConAgra took major stake in this company . But even after this stake sale ITC hold about 30% stake in this company. Even with a majority stake ,ConAgra was not aggressive and not interested to bring any of its popular international offerings to Indian market through this company. This may be because of  two reasons .First one is the presence of ITC in its management itself .Even if ITC held some interest in this company , during this period they were trying to enhance their presence in Indian food market through the parent company itself. In one sense ,ITC itself is a potential competitor for Conagra .Sensing this ,Conagra seems to be reluctant to introduce more products from their international brands through a company shared with the future competitor. Secondly .Indian market was not prepared to accept RTS /snack food type offerings at that time ,which also limited its scope here. But now India has grown a lot and the habits of  Indians changing very  positively for accepting the products of a company like ConAgra . What is positive at this juncture is the decision of ITC to completely exit from this company . Now ITC is selling their stake through market operations and some mutual funds are accumulating this stock. Big investors like Rakesh Jhunjunwala already entered in this scrip in the past . Currently ITC’s  holding in this company is  very limited and it is expected to exit completely in this quarter itself. At present Agrotech foods offering only limited products which includes Sundrop edible oil, ACT II Popcorn , Sundrop Peanut Butter, Healthy World Quick Dried Tender Green Peas, Crystal  sunflower oil ..etc.  Now the circumstances are very favorable for aggressive launch of its well accepted products in vast  Indian market  , and it is every reason to believe ConAgra can’t  ignore  this  market for long time . Supported by a world leader,  Agro tech foods may turn as a multibagger even from current alltime high level .The  moot question is the attitude of Con Agra towards this company going forward .Risk takers with patience may go for it at  CMP  Rs.327/-

13 comments :

  1. DEAR SIR,

    I purchased GOVIND RUBBER at 23 but the current price is 19. I am at a huge loss, please let me know what needs to be done. How are the future prospects of the company.

    Thanks SIR.

    ReplyDelete
  2. I have mentioned in the front page of my blog itself,it is not intended for short term traders and only for pure investors. If you are a person not able to suffer a notional loss of Rs.4/-and mentioning it as a "HUGE" loss and getting sleepless nights on this , it not only this blog but the entire stock market is not a perfect place for people like you.

    Hi man ,

    Even a lady will take at least 9+ months for a normal delivery.

    ReplyDelete
  3. VALUEJI

    WHAT YOU SAID IS CORRECT ,LOSS IS THE PART OF THE GAME AND WE SHOULD ACCEPT IT .IF NOT WILLING TO TAKE RISK ,GO TO BANKS AND PUT FD AND DON'T COME TO STOCK MARKET .PATIENCE IS ANOTHER IMPORTANT FACTOR FOR VICTORY HERE.ONCE WARREN BUFFET WROTE "NO MATTER HOW GREAT THE TALENT OR EFFORTS, SOME THINGS JUST TAKE TIME. YOU CAN’T PRODUCE A BABY IN ONE MONTH BY GETTING NINE WOMEN PREGNANT."

    VINAY
    GUNTUR

    ReplyDelete
  4. Thanks sir for your valuable feedback. I apologise. Anyways I will continue with my investments.
    I will be very thankful to you if you can provide more higlight on Govind rubber.

    ReplyDelete
  5. Hi,Valu Gem
    I went trough ur pasr recomnds and found most of your picks have doubled or given good returns. Is still worth making new investments in your old recomentations or is it prudent to invest in your new recomnds. Thanx

    ReplyDelete
  6. Dear Aluwalia

    It is difficult to say in general.Some of them are recommended for profit booking/ sale later.So pls send a mail to me by mentioning the name of company.

    ReplyDelete
  7. dear valuepick sir,

    what is your opinion on coal india , is it worth buying now also ?

    thanks

    ReplyDelete
  8. Dear Gopi

    CIL may consider if you are bit conservative and long term view.

    ReplyDelete
  9. hi,

    whats your opinion on Kinetic motors- is it worth to have it ?

    ReplyDelete
  10. Can you suggest 5-6 more names like ITC agro tech , which can be held as investment with a long term horizon .Long term mean 3-5 yrs time frame .

    ReplyDelete
  11. what is your opinion on coal mining industry in India

    ReplyDelete
  12. Dear sir,
    What is your view on oriental carbon and chemicals,by considering its expansion.

    ReplyDelete

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