ADVANTA INDIA - RESULT UPDATE

On a consolidated basis company posted a turnover of Rs.255 Cr v/s Rs.176 Cr and a net Profit of Rs.13 Cr v/s a Loss of Rs.3.45 Cr .EPS is Rs.7.9/  , for March quarter. Recommending to HOLD

ADVANTA INDIA - BUY ( REPEAT)

Advanta India is a true  MNC in agriculture sector from United Phosphorous Group. It  is the holding company for the global business of Advanta. Company is operating in various countries includes  India, Australia, Thailand, Argentina USA ..etc .Company is a major player  in research, production and marketing of hybrid seeds and oilseed crops . Company also  having a very good R&D and in India it is collaborating with universities like University of Mysore and University of Dharwad for developing new varieties. Company is producing wide variety of seeds include sunflower, corn, rice, rapeseed mustard, sorghum Oats ..etc. This geographical and product diversification reduces the risk of  seasonality to a certain extend in this business. In Thailand ,company is operating through Pacific Seeds(Thai) Ltd ,in Australia it is with Pacific seeds Pty Ltd, and in Argentina it is through Advanta seeds and Advanta Semillas . Company also made some acquisitions in USA like Crosbyton Seed Company and Garrison & Townsend Seed Company along with a subsidiary Advanta US Inc. Many more mid size companies are also in its fold as step down subsidiaries like Nutrisun oil . A major  negative of this company till now is the  huge debt of in its balance sheet . Interest of the same is eating a major part of its profits. Advanta is now  planning to de- leverage .As a first step company recently re-structured its debt by issuing FCCB and  repaying part of debt carrying high interest rate  .Effect of this arrangement is already visible is latest September qtr result. On a consolidated basis company posted a turnover of Rs. 696 Cr and a net profit of Rs.27 Cr in last year  .For the latest qtr ended September , Company posted  a sales of  Rs. 254 Cr v/s Rs.176 Cr. and a net profit of Rs.13 Cr v/s Rs.10 Cr After a long period  of up and downs in its performance, it is expected to show a steady growth from here on.At current market price of Rs.395 , it is a good BUY for medium to long term investment.

 

KAVERI SEED COMPANY / ADVANTA INDIA - RESULT UPDATES

Both these companies declared very good results for the June quarter

KAVERI SEED COMPANY LTD.


Turnover   Rs.241 Cr  v/s Rs.148 Cr

Net Profit  Rs.47 Cr   v/s Rs.31 Cr

EPS Rs.     Rs.34.5     v/s Rs.23



ADVANTA INDIA LTD


Turnover   Rs.225 Cr  v/s Rs.175 Cr

Net Profit  Rs.17 Cr   v/s Rs.4 Cr

EPS Rs.     Rs.10     v/s Rs.2.50


Since both these companies are in hybrid seeds segment and this industry is seasonal in nature ,it is not prudent to annualise the quarterly results based only on June quarter result.

Both these companies having huge potential in this space ,HOLD  both for long term.

ADVANTA INDIA LTD - BUY

 

 

 

Advanta India is a true  MNC in agriculture sector from United Phosphorous Group. It  is the holding company for the global business of Advanta. Company is operating in various countries includes  India, Australia, Thailand, Argentina USA ..etc .Company is a major player  in research, production and marketing of hybrid seeds and oilseed crops . Company also  having a very good R&D and in India it is collaborating with universities like University of Mysore and University of Dharwad for developing new varieties. Company is producing wide variety of seeds include sunflower, corn, rice, rapeseed mustard, sorghum Oats ..etc. This geographical and product diversification reduces the risk of  seasonality to a certain extend in this business. In Thailand ,company is operating through Pacific Seeds(Thai) Ltd ,in Australia it is with Pacific seeds Pty Ltd, and in Argentina it is through Advanta seeds and Advanta Semillas . Company also made some acquisitions in USA like Crosbyton Seed Company and Garrison & Townsend Seed Company along with a subsidiary Advanta US Inc. Many more mid size companies are also in its fold as step down subsidiaries like Nutrisun oil . I feels ,Since company’s major  operations are out side India and its standalone results not showing  much improvement ,  this company is not catching the investor attention till now. The only negative is the huge debt of the company - interest of the same is eating a major part of its profits. In order to reduce the debt ,company is now planning a rights issue in near future .On realization of the amount , Advanta is planning to repay its debt in a big way to reduce high leverage . This will dramatically improve its financials going forward . On a consolidated basis company posted a turnover of Rs. 696 Cr and a net profit of Rs.27 Cr in last year  .For the latest qtr ended Sep , Company posted  a sales of Rs.176 Cr v/s Rs.133 Cr and a net profit of Rs. 10 Cr v/s a loss of Rs. 2 Cr . Really it is not a good number for a company like this size  , but we should consider certain facts. Company is in the process of the integration of its international businesses and it also faced  some  issues like unfavorable weather condition ,exchange ratio and some quality issues of the old stocks etc .. . Weather condition is the only main issue which is beyond the control of any company operating in the agriculture related  sector. Most of the other mentioned factors are changing favorably to the company along with the vast opportunities emerges because of the rise in food inflation world wide. Considering the huge potential in this sector , the proven management abilities of United Phosphorous group and its world wide presence, this is really a stock to included in the portfolio of any investor for reaping the long term gains . Currently Advanta is trading around Rs.389/-