Wednesday, December 29, 2010


I.T. Companies are catching the attention of market participants mainly because of the expected favorable change in demand from foreign economies and some stability in exchange ratio. Onward Technologies Ltd is a small size IT company started by Mr Harish H Mehta Co-Founder & Former Chairman of the National Association of Software & Service Companies (NASSCOM).Company is offering solutions for sectors like Engineering Design Services ,Banking and financial services ..etc. Company is operating through various subsidiaries and associate companies namely Onward  eServices Limited (OeSL) , Onward  Technologies,  Inc.  North   America (OTI),Onward Technologies   GmbH Germany  Onward Technologies Ltd., UK and Onward Technologies Ltd., UAE. Company recently concluded a restructuring process in its subsidiaries and streamlined its operations. Cost cutting efforts and efficiency improvement steps helps the company to report better performance in recent past after a long time. For the six months ended September qtr company posted a turnover of Rs.46 Cr and a net profit of Rs.2.85 Cr ,which was in red in last year. After a gap of three years company is expected to came back to black in this FY .Keep an eye on this one which is currently trading around Rs.44/-

Tuesday, December 21, 2010


Panacea Bio-tec is the second largest vaccine manufacturer in India. About  70% income of the company is generated from vaccine sales and rest from formulations. It is one of the largest oral polio vaccines (OPV) maker in India .In the formulation division, company is concentrating in medicines for pain management, cardio vascular disorders and diabetes. Company is a supplier to various UNICEF projects , and recently received an order for’ EasyFive’ vaccines worth $ 222 Million .For oral polio vaccine ,Panacea received an additional order for $ 120 million which is to be supplied in 2010 itself. Government’s thrust in vaccination is a big positive for the company. Due to heavy forex loss ,company posted loss in last year but returned to profit in this FY. Slightly higher debt level is a problem for the company at present. Higher growth rate with improving margin and a cash balance close to Rs.100 Cr mitigate this risk .For the September qtr ,company posted a turnover of Rs.256 Cr ( Rs.169 Cr) and a net profit of Rs.17 Cr ( Rs.2 Cr) . Company is expected to post an EPS of Rs.20+ in FY 2012 .One may BUY at CMP of Rs.192/- for a 50 % appreciation by the end of next FY.

Saturday, December 18, 2010


Hotel industry ‘s fortunes are closely related with the growth in Tourism and Business Travel. After many  years of lackluster  performance, due to recession in western countries which reduces the chance of  higher spending for  vacations in one side and limited chances for business travel on the other side,now this industry  started to show some early signs of revival. Royal orchid Hotels (ROH) is a Bangalore based hotel chain running around 15 hotel properties across the country. Royal Orchid having presence in major Indian Cities includes Bangalore,Mysore,Mumbai,Ahmedabad,Jaipur,Pune,Goa,Hyderabad and Hospet.
Company is now  adding new properties in cities like Mumbai and entering into new locations like Shimoga , Mussoorie ..etc either directly or through joint ventures.It is planning to raise the inventory of rooms to 2000 by this FY and 4000 by 2015.Almost 70% income  of ROH  is generated from business travelers and balance from tourists.It is a point to note that ,major properties of the company is located around IT hubs like Bangalore ,Hyderabad and Pune. Any revival in IT Sector will positively impact the business fortunes of the company. For the financial year ended March 2010 ,on a consolidated basis ROH posted a turnover of Rs.120 Cr and a net profit of Rs.7 Cr which was one of the worst performance in recent past .For the half year ended Sep 2010 ,ROH doubled its net profit compared with last year. Company’s well known brand, good repute ,pan India presence ,revival both in tourism and mainly in IT sector related business travel ..etc are expected to make it an industry out performer going forward. At CMP of Rs.73/- .it is a value BUY.

Tuesday, December 14, 2010


I have recommended a BUY on this ITC Group company @ Rs.165 /- on 25 th April ,2010.After touching a high of Rs.316/-  ,currently it is trading around Rs.240/- .Considering the better performance of the company  and the bright prospects of the Travel and Tourism industry , I reiterate a BUY at current level.For the Six month ended September ,ITHL posted a net profit of Rs.8.17 Cr v/s Rs.3.64 Cr for the same period in last FY.

Old Report Can be accessed HERE

Saturday, December 11, 2010





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/-

Wednesday, December 8, 2010


Kennametal India is one of my old recommendation around Rs.350/- (Old Report Can be accessed HERE) .Currently it is trading @ Rs.505/-.In a latest development ,company announced its parent's decision to de-list the company from stock exchange .This will be followed by reverse book building process and the rate is expected to be higher than the current market price of Rs.505/-


Aries Agro is one of my old recommendation at 100-110 level.After touching a high of Rs.203/- in the month of September , currently it is ruling around  130/- . Aries showing  good performance in its operations in quarter after quarter and also having a transparent management.I reiterate an ACCUMULATE at current level for decent return in  long term.

Old report is Reproducing Below

Mounting food inflation is a serious threat to the economies worldwide. But some companies are benefiting from this situation .All governments are forced to take steps to improve food production using scientific methods and most modern techniques. Companies from the agri- related sectors are the major beneficiaries of  government’s such efforts.In India micro irrigation sector is getting very big boost in every budget .Even though fertilizer companies are also important in this perspective ,government control on fertilizer prices limiting their potential. Along with fertilizers, micronutrients  are  also gaining acceptance among Indian farmers. Moreover micronutrients  are not subject to the regulatory constraints that fertilizers face. The micronutrients business has considerable potential in the Indian context. Factors such as low yields of major food grains and horticultural crops, high soil alkalinity and intensive cultivation are the key demand drivers for micronutrients. The market for micronutrients such as zinc, iron and copper in India, is expected to double over the next two decades. ARIES AGRO is the largest player in micronutrients from the organised sector in India. The other two players in this sector(from organized space)  is Ranade Nutrients and Karnataka Agrochem ,but both are only regional players. Aries has 65 branded products coming from six  manufacturing units in India , one each at Mumbai, Kolkatta, Hyderabad , Bangalore ,Ahmedabad ,Lucknow and one new factory in UAE which is mainly for catering middle east region and North Africa .Aries is in the process of launching new products which include Natural amino acid chelates,Boidegradable chelates and Boidegradable plant protection products. With the inauguration of its Ahmedabad factory company entered into a new space of  Bio fertilizers too. Company’s largest  distribution network of 5500 distributors and 76500 (seventy six thousand five hundred) retail outlets  across India  is the main attraction for a rural centric business like this. In future company can easily roll out allied products throughout this network without much marketing efforts. In addition to this distribution points company has added a fleet of 100 rural retail vehicles called ‘Krishi Vinjan Vahan ‘ in 9 states in India.This is mainly for improving company’s rural reach and advisory services.

Going forward big corporates are expected to coming into the farming  sector of India in a big way. This will surely improve the prospects of  the products of  companies like Aries along with the initiatives of governments to increase food production. 

Saturday, December 4, 2010


Some Companies are always like tortoise, hiding the most exiting part of their business under a shell called either subsidiaries or joint ventures till a critical size is  achieved. When such business grows these subsidiaries will eventually merged with the main company or de-merged to unlock the valuation. Till such a merger/de-merger  happens, the main company will known for its boring business and enjoying low valuation. But on merger/de-merger the entire picture rapidly changes and catch the market fancy in a short period . Meanwhile, utilizing the low valuation as an opportunity ,promoters may mop up the entire floating stock from market .CHEMBOND CHEMICALS ( BSE CODE - 530871) is such a play which is unnoticed by most of the market participants ,even if its main business is growing decently.Even if this company have six divisions including its subsidiaries and joint ventures ,it is known as a Construction Chemical manufacturer. 
Under this fold company is making construction chemicals, water proofing compounds, concrete repair products..etc.Major clients of this division includes  RDC Concrete Ltd,          
J K Laxmi RMC ,Birla Readymix , Larsen & Tubro Ltd., Oriental Structural Enginerring Quark City India Pvt. Ltd., Sunway Constructions Ltd. , Unitech Ltd. ACC RMC , Hindustan Construction company, Nagarjuna Construction Company , Gammon India DLF Laing O" Rourke India Ltd..etc.  Chembond have a nationwide distributor network and known as a quality producer in this category. Another division of the company is Coatings division which is making corrosion protection coatings for structural s  and industrial floor coatings materials. Under the trading division company offering various types of construction chemicals and representing ‘Peramin AB’ of Sweden ,a leader in this industry- in India. Chembond’s biotech division is through an associate company –Chembond Enzyme Company Ltd- supplying products which are widely used in industries like Textile,Distillary and Animal feed. Company also having a joint venture with chemical major Henkal for manufacturing metal treatment chemicals known as Henkal Chembond Surface Technologies Ltd.

The promising part of Chembond is its increasing  presence in the Water,Waste water and Effluent treatment business. Chembond Ashland Water Technologies is a company jointly promoted with Chembond Chemicals (55 %) and Ashland Inc of USA .This company is manufacturing various type of water treatment chemicals for cooling water treatment,boiler feed water treatment,waste water treatment..etc and finds applications in industries like Chemicals,Power generation ,Refinery ..etc.

                                                              In the beginning of 2010, Company started a 51 % joint venture (H2O  innovations India Ltd) with H2O Innovations Inc of Canada for equipment based solutions for Water treatment ,recycle and re-use. This industry having tremendous potential in India and the overwhelming response to the recently concluded public issue of VA Tech Wabag is an indication of  the potential of this sector. Within a short span of time this new company already received prestigious orders.


Company is performing very well in financial front and rewarding share holders accordingly. For the financial year ended March 2010 ,Chembond posted a turnover of  Rs.118 Cr and a net profit of Rs.5 Cr.For the latest September qtr , it posted a sales of Rs.35 Cr v/s Rs.27 Cr and a net profit of Rs.2.13 Cr v/s Rs.1.20 Cr  and an EPS of Rs.3.34 .Company also declared a bonus issue in this year in the ratio of 1:1 along with dividend.


Based on the  bright prospects of the industries in which company is operating, with a  share holder friendly management ,aggressive open market purchases by them – this is a perfect fit for  long term portfolio.But one should note that ,since the floating stock is reducing by the continuous purchase of promoters on a day by day basis ,it turned as a low liquid counter .CMP is Rs.190/-.

Thursday, December 2, 2010


I have recommended a BUY on Neuland Laboratories on 27.11.2010 @ Rs.119/-.(For the report just scroll down) .Today it closed at Rs.156/- an appreciation of more than 30% in just three trading days. Requesting to book profit at current level,re-entry may consider below Rs.130/-

Wednesday, December 1, 2010


Aries Agro is one of my old recommendation at 100-110 level.After touching a high of Rs.203/- in the month of September , currently it is ruling around  140-145 range . Aries showing  good performance in its operations in quarter after quarter and also having a transparent management.I reiterate a BUY at current level for decent return in medium to long term.

Old report is Reproducing Below

Mounting food inflation is a serious threat to the economies worldwide. But some companies are benefiting from this situation .All governments are forced to take steps to improve food production using scientific methods and most modern techniques. Companies from the agri- related sectors are the major beneficiaries of  government’s such efforts.In India micro irrigation sector is getting very big boost in every budget .Even though fertilizer companies are also important in this perspective ,government control on fertilizer prices limiting their potential. Along with fertilizers, micronutrients  are  also gaining acceptance among Indian farmers. Moreover micronutrients  are not subject to the regulatory constraints that fertilizers face. The micronutrients business has considerable potential in the Indian context. Factors such as low yields of major food grains and horticultural crops, high soil alkalinity and intensive cultivation are the key demand drivers for micronutrients. The market for micronutrients such as zinc, iron and copper in India, is expected to double over the next two decades. ARIES AGRO is the largest player in micronutrients from the organised sector in India. The other two players in this sector(from organized space)  is Ranade Nutrients and Karnataka Agrochem ,but both are only regional players. Aries has 65 branded products coming from six  manufacturing units in India , one each at Mumbai, Kolkatta, Hyderabad , Bangalore ,Ahmedabad ,Lucknow and one new factory in UAE which is mainly for catering middle east region and North Africa .Aries is in the process of launching new products which include Natural amino acid chelates,Boidegradable chelates and Boidegradable plant protection products. With the inauguration of its Ahmedabad factory company entered into a new space of  Bio fertilizers too. Company’s largest  distribution network of 5500 distributors and 76500 (seventy six thousand five hundred) retail outlets  across India  is the main attraction for a rural centric business like this. In future company can easily roll out allied products throughout this network without much marketing efforts. In addition to this distribution points company has added a fleet of 100 rural retail vehicles called ‘Krishi Vinjan Vahan ‘ in 9 states in India.This is mainly for improving company’s rural reach and advisory services.

Going forward big corporates are expected to coming into the farming  sector of India in a big way. This will surely improve the prospects of  the products of  companies like Aries along with the initiatives of governments to increase food production. 

Saturday, November 27, 2010


Traditionally ,Pharmaceutical companies are known as defensive bets .It also giving reasonable return in bull market ,that is why conservative investors are always giving preference for pharma companies in their portfolio. Considering the chances for  low cost manufacturing and recession proof(to some extent) status of the business R&D driven pharma companies are always catching market attention. Neuland Laboratories is such a company from Hyderabad started in 1984. Neuland is promoted by Dr D R Rao and its board is supported by eminent personalities includes Mr Humayun Dhanrajgir (Former MD of Glaxo India), P V Maiya  (Former chairman of ICICI Bank) Mr SP Budhiraja(Former MD of  IOC) ..etc. Company is in the manufacturing of Active Pharmaceutical Ingredients(API’s) ,Contract Research and manufacturing (CRAM) and Clinical research. It also started the production of Peptides last year. Neuland having two USFDA approved manufacturing units ,one at Bonthapally and  other at Pashamylaram  near Hyderabad and exporting its products to more than 40 countries worldwide..It also have a strong R&D with 165 scientists. Company is one of the largest manufacturer of Ranitidine in India.Neuland’s sales in segment wise is as follows, 45% from Quinolones ,18 % Cardiovascular,16% CNS,10% Anti Ulcerants,4% Anti Asthma and rest from others. Company having two subsidiaries Neuland laboratories KK Japan and Neuland Laboratories Inc USA. Recently company started a joint venture with  Cato Research Israel to offer clinical research services in India .Neuland owns 70% stake in this new company called Cato Research Neuland India Pvt.Ltd.  Neuland’s R & D division has identified 13 new products for development in this year.


In the history of last 10 years ,Neuland posted a loss ( Rs.7 Cr )in last year with a sales of Rs.282 Cr.This is mainly because of the  production disruption  due to renovation of plants, unfavorable exchange rate and some regulatory problem of one of its products. Most of these problems are stabilized now and company is expecting better days ahead. Company has taken various cost cutting measures and steps  for the optimum utilization of its resources. For the last two years ,Neuland made heavy investment in infrastructure including production facilities ,R&D and
H R. Benefits of these efforts are also expected to start from this year. It is a point to note that before the loss making last year ,in two previous years ,company posted EPS more than Rs.20/- and paid hefty dividends to share holders.Now the management is confident to achieve better results ahead and their optimism seems to be true based on the September qtr numbers. In the latest qtr Neuland posted a turnover of Rs.101 Cr v/s Rs.61 Cr and a net profit of Rs.3 Cr v/s Rs.70 lac .On an equity base of Rs.5.47 Cr ,company posted an EPS of Rs.5.30/- in latest qtr .Even after deducting the loss in first qtr ,it is expected to perform very well on a full year basis. A good management with transparency, integrity  and ethics is the big positive of this Company. Currently Neuland is trading @ Rs.119/-  which is even below its book value of Rs.126 /-. One may consider a BUY at current level with medium to long term view for decent return.

Thursday, November 25, 2010



Tuesday, November 23, 2010


India's largest pharma company not need any explanation for the investors. After the take over of Daiichi Sankyo ,initial hiccups on integration of management is almost over .Under the new leadership,company is expected to perform well going forward.In the latest qtr ,Ranbaxy's domestic sales posted very good performance but it partially offset by the not so good sales outside.Company is expected better performance in near future due to the beginning of the supply of Nexium API and formulations.In an effort to strengthen its local sale,company recently recruited more than 1000 field staff.All these efforts under the new management is expected to help the company to capture the past glory. Investors can add Ranbaxy  in their portfolio for long term gains.Considering the volatility in the  market ,it is better to buy in small lots.CMP is Rs.570/-

Sunday, November 21, 2010


Ingersoll Rand India is a subsidiary of US-headquartered Ingersoll-Rand plc . It is one of the largest manufacturers of compressed air systems in India. Its debt free status and huge reserves makes it an attractive bet for long term investors.Since there is slow growth in its overseas business,now parent company is increasing its interest in its Indian arm.Ingersoll Rand now planning to increase the capacity  for manufacturing heating, ventilation and air conditioning  products. Company is expected to make India as a hub for their regional requirements.For the half year ended September 2010,company posted a turnover of Rs.113 Cr (Rs.81 Cr) and a net profit of Rs.18.5 Cr (Rs.10.8 Cr) .Factors like good support from parent company, well accepted brand ,healthy balance sheet with around Rs.650 Cr cash reserves..etc , makes it an ideal candidate even for  a conservative portfolio.Currently IR is trading around Rs.450/- . Investors can BUY it around Rs 430-440  for decent return in medium to long term

Thursday, November 18, 2010


I have recommended LUDLOW JUTE AND SPECIALITIES as a BUY on decline @ Rs.86/- ,before the declaration of second qtr result . Based on the robust performance I reiterate a BUY at current level of Rs.88/- .For the half year ended September ,Company posted a turnover of Rs.162 Cr  v/s Rs.108 Cr , a net profit of Rs.16 Cr v/s Rs.4.7 Cr   and an EPS of Rs.15/-

Old Report can be Accessd HERE

Monday, November 15, 2010


I have recommended a BUY on SRI ADHIKARI BROTHERS TELEVISION NETWORK on 27th February 2010 @ Rs.27/- .(Old Report can be Accessed HERE) .After touching a high of Rs.73.50/- in last week ,it is now quoting around Rs.59/- .On a standalone basis ,in the September quarter company posted a turnover of Rs.9.5 Cr v/s Rs.5.4 Cr and a net profit of Rs.1.4 Cr v/s a loss of  Rs.81 lac .For the half year ended SAB posted a turnover of Rs.17 Cr and a profit of  Rs.2.83 Cr and an EPS of Rs.1.61 .In a consolidated basis, it is expected to perform even well in coming years due to the robust performance of the newly launched Hindi Music Channel ' Mastiii' through its subsidiary.Company is also expected to start few more channels in coming years.Vast experience of promoters is the main plus point of this company .Investors can HOLD at current level and any correction below Rs.50/- due to overall negative sentiments in market(if any) may taken as a chance to ACCUMULATE it for long term

Sunday, November 14, 2010


Kilburn Chemicals is a known producer  and exporter of  Titanium Dioxide and Ferrous Sulphate Hepthahydrate . Its plant is located at Tuticorin and registered office is in Chennai..Titanium dioxide is widely used in the production process of Paint, Rubber, Paper, Detergents, Cosmetics, Printing Inks, Textiles, Plastics  .etc. Ferrous Sulphate Hepthahydrate is mainly used in Cement industry and for manufacturing water treatment chemicals. Sulphuric acid is one of the raw material for the production of  Titanium Dioxide. Low availability and higher prices of Sulphuric acid causes for erosion of margins for the company in the past. But now,new capacities are added in various parts of the country for producing Sulphuric acid and its price and supply stabilized .Company’s user industries are also showing good growth .This situation is expected to help the company to report better numbers going forward. For the half year ended Sep , Kilburn Chemicals posted a turnover of Rs.55 Cr and a net profit of Rs.5.6 Cr . Medium to long term investors can consider it at CMP of Rs.59/-

Thursday, November 11, 2010


Packaging companies are one of the indirect beneficiaries of the increasing consumer spending ,mainly in FMCG sector . TCPL packaging is one of the mid size packaging companies based in Mumbai .Company having four plants – three in Silvassa and one in Haridwar.It is one of  largest manufacturers of printed folding cartons in India . Its products list include Printed blanks & outers, Folding cartons, Litho Lamination, Plastic cartons, Blister paper … etc .Company also exporting its products to countries like UK,USA, UAE. Many of the Indian FMCG majors are the customers of the company like  ITC, Radico Khaitan, Jagatjit Industries Ltd., Khoday's, Nestle, Glaxo Smithkline, Kellogg India, Heinz, Amul, Hindustan Unilever Ltd , Colgate, Godrej Sara Lee, Godrej Consumer Products, Cavin Kare, Marico, Himalayan Drugs ..etc . Even if this company is not so popular among investors ,it is one of the best play in listed packaging space . TCPL is growing steadily and paying dividend without any interruption for the past many years . Last full year ,company posted a turnover of Rs.188 Cr .PBDT is Rs.20 Cr and CEPS is Rs.21/- .For the current year ,company is expected to improve its financials mainly due to better demand situation and benefits from  recent capacity addition. At CMP of Rs.55 /- ,it is a good BUY for medium to long term.

Tuesday, November 9, 2010


After a long period ,textiles companies are making big  profits due to good demand  and better realization. Improvement in their bottom line will surely translate into more expansion and modernization programmes . This will surely improve the prospects of textile machinery makers going forward. Veejay Lakshmi Engineering Works Ltd (VLEWL)  is a Coimbatore based textile machinery manufacturer started operations in 1974.Its products list includes Two-For-One twisters, Automatic cone Winders ,Precision Propeller winders, Random Assembly Winder ..etc For the past many years ,company’s performance was badly affected due sluggish demand which is now reviving . Any decision to continue the presently suspended TUFS will be an added advantage for textile machinery sector as a whole. For the half year ended September 2010 , company posted  a turnover of  Rs.50 Cr (Rs.29 Cr) and a net profit of Rs.2 Cr (Loss of Rs.1 Cr) and an EPS of Rs.4.13 /- . Medium to long term investors may consider a  BUY at CMP of  Rs.76/-

Monday, November 8, 2010



Dear Stakeholders,

Hearty welcome to you all. On behalf of the Board of Directors of Kaveri Seed Company Limited and on my own behalf it is my privilege and honour to extend a very warm welcome to the 23rd Annual General Meeting.  At the outset, I am thankful to all the shareholders of the Company for their whole hearted support and cooperation in furthering the overall growth and progress of the Company.

I am sure, you all must have gone through the Annual Report of the Company for the year 2009-10.  Your Company’s performance for the year under review has been quite satisfactory despite aberrant weather- failure of monsoon leading to drought followed by devastating floods, factors that destabilize agriculture.  It is heartening to note your Company’s business has significantly improved on operational performance compared to yesteryear and records a positive financial growth.  The year’s Gross Turnover of Rs. 165.00 Crores enhanced a growth rate of 32% where as the profit after tax Rs.29.07 Crores improved the growth rate of 16.77%.  The accomplished financial growth sustains the Company’s business and help attaining market leadership in seed and agribusiness.  Your Company will Endeavour to show remunerative pathways to shareholders as well as taking care of well being of farmers.  Investors in Kaveri Seed Company Limited can confidently look forward for robust and sustainable growth in the years ahead.   

The Indian Seed Industry is vibrant and grown over the years to become the fifth largest in the world with an estimated value of 1500 million US $ and an annual growth rate of 12% to 13 %.  India is one among the few countries in the world where the seed sector is well positioned with the potential to become global seed production hub, if nurtured carefully.  With the food crisis looming large world over, it is evident that the future rests with countries wielding grain power and those in agri business realize quality seed is the key to such empowerment.

Investment in Agriculture R&D is the most effective way of ensuring food security and economic growth.  The pressing need is for quality seed of varieties and hybrids that are not only high yielding but resilient to less input- water, fertilizers etc.  Thus food security is interwoven with the seed security.  The Kaveri Seed Company’s R&D targeted its research for developing hybrids that excel in the market with quality assurance.   Your Company with vast experience in seed production of major agricultural crops backed by a very strong in-house R&D program for crops-maize, cotton, sunflower, bajra, sorghum, rice and several vegetable crops nurtured a competitive edge in seed and agribusiness.  With over 600 acres of farm land owned by the Company and dedicated team of researchers, the Company is conscious of the changing needs of farmers and consumers to design and develop productive hybrids that fetch rewarding returns.  Being India’s leading National Seed Company, the R&D focus centers round combined use of conventional breeding and biotechnology to advance the yield frontier and stabilize it through incorporation of genetic resistance to biotic and abiotic stresses.  During the year under report, our R&D strived hard to accelerate to new and sustained levels of innovation as exemplified by the performance of pipe line hybrids in All India Coordinated Trials and commercial launching of premier hybrids.

Vegetable consumption, nationwide is increasing along with seed volume and value.  In view of demand for higher quality and more variety in vegetables, Kaveri R&D is laying new thrust to vegetables with emphasis on tomato, okra and chilly.  All of us anticipated approval for BT brinjal in India that is not to be.  Regardless of this development, commercialization of GM vegetables, particularly in developing countries like ours, is inevitable.  Despite current public opposition to GM technology, environmental, quality and production efficiency benefits will eventually favour wide adoption of the technology in the country.  Once the way is paved for Bt Brinjal, GM rice, maize, wheat and a number of vegetable crops follow the suit, heralding an era of biotech crops.  As biotechnology steers the breeding process in the near future, our R&D is being geared up by strengthening human resources and expanding the infrastructure.  A battery of transgenic containment units are getting ready at Gowraram and plans are afoot to build mega greenhouses for Flori and Olericulture.  Fortifying Bt cotton with herbicide tolerance (HT) and drought tolerance (DT) is our research agenda.  After Bt cotton it is the turn of hybrid rice with huge market potential.  Whatever may be the current seed production problems, they are not insurmountable. And we need to overcome to sustain the technological option for increasing food production.

On the product front, the Company is successful in launching two of its premier Bt cotton hybrids in the brand names of Jadoo and Jack pot and a pearl millet hybrid, Super Boss.  Sampada (red gram) Sampoorna (paddy) are the newly launched varieties.  Based on the performance at National level, two of our maize hybrids, Kaveri 50 and KMH 25K60 along with bajra hybrid, MH 1553 were identified by Varietal Identification Committee for eventual notification.

Germplasm is the genetic wealth of the Company.  The vast collection of germplasm that accrued over the year has been streamlined for conserving in “Gene Bank” In order to establish legal ownership of the Company’s hybrids and their parental lines, efforts are underway to registering the lines with PPV & FR authority.  Till date, ~ 100 applications were filed with PPV & FRA.

To augment natural resources-land and water, the Company has embarked on plans to bring more area under plough and judicious use of scarce water.  Towards this goal, farm area to the tune of nearly 120 acres has been brought under cultivation of crops for commercial production of seed.  The rain water harvest is in place for use in new cropped area.  In addition, drip irrigation has been extended to cover more area in Gundla Narasingpur farm and elsewhere.   

 Your Company is fully dedicated to improve the field and vegetable crops continuously. Besides corn and sunflower, cotton, pearl millet, rice, grain sorghum, mustard and various hybrid vegetables are part of our extensive product portfolio in which the company enjoys a sizeable share in the Indian seed market. Our vegetable crops include tomato, okra, hot pepper, water melon, bitter gourd and coriander.  The Company had made its presence in the market by releasing high yielding hybrids of these vegetable crops. In addition, to these products the Company has extended its business of Micronutrients and Bio-products to produce chemical –free and eco-friendly pesticides, fungicides and yield enhancers and thereby augmenting the product assortment.

Your Company is on the ascending path to reach new heights in seed and Agri- Business.  Your Company has recognized One among the Top 39 Indian Companies in the world leading business magazine of “Forbes Asia” published under a list of 200 top-performing small and midsize Companies in “Asia’s Best Under A Billion”.

I express my sincere gratitude to our shareholders, farmers, dealers, bankers, employees, the Central and State Governments and other regulatory authorities/agencies for providing continuous support at all times and look forward to have the same in our future endeavors.   I wish to express my sincere appreciation to my colleagues on the Board for their continued support.  I am grateful to you all for your cooperation and the trust that you have reposed in us.

Best Regards,

G.V.Bhaskar Rao
Executive Chairman.

Saturday, November 6, 2010



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/-

Thursday, November 4, 2010



Presenting 5 stock ideas for this Diwali.First 3 for all and the rest only for high risk takers.

* based on the closing price of .3/11/2010

1)  YES BANK                                                 CMP 372.50/-

YES BANK, the new generation, fastest Growing Private Bank in India, is an outcome of the professional entrepreneurship of its Founder, Rana Kapoor who has a brand in the Indian banking industry.  The bank providing all banking services such as Corporate and Institutional Banking, Financial Markets, Investment Banking, Corporate Finance, Treasury operations, Branch Banking, Business and Transaction Banking and Wealth Management business to corporate and retail customers. Yes Bank presents a remarkable record in every operational metrics since its inception like Consistent improvements, year on year in top- line as well as bottom-line growth, industry-best figures on RoE and cost-efficiency with the lowest NPAs.
The bank’s 69.8 per cent business contributes corporate and institutional banking, followed by commercial banking at 19.6 and branch banking at 10.6 per cent, respectively.  For the second qtr ended Sep 2010, Yes Bank reported robust net profit growth of 57.8% yoy and 12.7% qoq to Rs. 176cr, well above street estimates. The Bank’s Advances grew by a strong 15.6% qoq and 86.3% yoy compared to a marginal industry qoq growth of 0.6%. Deposits increased 32.3% qoq and 106.6% yoy compared to 1.6% qoq industry growth. NII registered a 95.8% yoy growth. During the quarter, the bank’s gross NPA ratio stood at 0.2% and net NPA ratio at 0.1%. The bank’s capital adequacy ratio improved to 19.4%, with tier-I capital of 11.0% .

Presently, the bank has 171 branch networks across the country and it has received 91 new branch licenses. The bank plans to have a network of 250 branches by June 2011 and 400 by FY 2012.  The bank successfully raised over Rs 1,170 crore through upper (Rs 640 crore) and lower tier II (Rs 306 crore), and tier I perpetual bonds (Rs 225 crore) in Q2. It is expected a CAGR of 51 % in advances and 56 % in deposits for FY 2010 to 2013.

At the CMP around  Rs. 370, the stock is trading at 20.5Xs its TTM EPS of Rs. 18 and 3.9Xs average book value. It is expected to report an EPS of Rs.30/- by FY 2012 .Considering the Bank’s high growth, Stable asset quality, professional management, moreover the India’s growth story; l YESBANK should register new records in its financial  front as well as in market going forward.


2) SELAN EXPLORATION                    CMP 355.55/- 

Selan Exploration is a Gujarat based Oil exploration and Production Company having rights to develop three proven oil fields in Gujarat – Bakrol,Lohar and Indora.As per estimates the  Bakrol oil field having a reserve of 73 million barrels and Indora  having much more . If we take the entire reserves as 100 million barrels on an extremely conservative basis and the average oil price as $ 75 /barrel , the value of reserve will be around  Rs.30000 Cr. Selan is one of the low cost producer and even after  providing the share of government and deducting the production cost, company is sitting on a gold mine. At a time of comparatively lower oil prices ,as a prudent strategy ,company  now concentrating in more Seismic data acquisition , Processing and interpretation activities  rather than drilling new wells .Result of this can be utilized at a time of better oil prices lately .Company also awarded two more fields namely Ognaj and Karjisan. Since the Oil prices are moving in a narrow range ,oil producing companies are not in limelight for the time being. But it is expected to move to higher level in correlation with the world wide recovery . So it is a perfect fit for true investors with patience for reaping big gains in future. CMP is Rs.355/-
3) ARIES  AGRO Ltd                                  CMP Rs 163.05/-                                                                                                                                 

Aries Agro Limited offers the widest range of products in the micro-nutrient  sector . The company also producing  value added secondary nutrients and water soluble NPK complex fertilizers. Aries recently expanded its product line to cover bio degradable chelates, organic chelates, sea weed extracts, seeds, synthetic chemical pesticides, bio fertilizers, bio pesticides and farm equipments.  During FY 10 the company launched 15 new products, taking its total products tally to 76 brands. Over past many years, Aries has built an extensive distribution network across 24 states, through a network of around 5000 distributors in the country. In addition, it also actively began marketing to institutions and also scaled up its sales under State development and drought/flood relief schemes. Currently, Aries products being sold in 1,75,000 villages located in 375 districts of the country. Aries have one of the largest manufacturing bases of specialty plant nutrition solutions in India.  It has also expanded manufacturing base in overseas. As of the end of 2009-10, Aries has a total manufacturing capacity of 84,600 MT per annum spread across 6 factories in India and an additional 70,000 MT per annum at its 2 Units in Fujairah and Sharjah. This is the largest world class manufacturing base of specialty plant nutrition solutions set up by any Indian Company.
In the current fiscal year the company plans to launch an additional 6 products. This will include further specialty plant nutrients, farm equipment and plant protection products, adding on to its already extensive range of 76 brands. The GoI’s favorable policies to improve food production using scientific methods and most modern techniques opens immense growth potential for the fertilizers and the micronutrients business in the country and Aries being one of the largest and the most established player in micronutrients space is expected to benefit from the same. CMP is  Rs.163/

                              HIGH RISK BUYS        

If you are not interested to take very high risk , just ignore the below mentioned two companies

4) KREBS BIOCHEMICALS             CMP Rs.37.95/-
Krebs Biochemicals was a darling of investors in the first half of 2000 and touched a high of Rs.276 /- in 2004. This is the only listed pharma company with equity investment  of two pharma majors , Ranbaxy laboratories and Dr.Reddy’s lab .Interest of both these biggies itself is a testimony for the potential of Krebs. This is one of the very few pure listed Active Pharma Ingredient(API) makers using the fermentation technology. The only another pure listed player is Biocon. This Hyderabad based company is promoted by Mr.RT Ravi  who has over 34 Years of experience in Applied Biochemical Research. Krebs had two units ,one in Nellore and other in Vizag .The unit 1 was dedicated for the production of Ephedrine and  Psuedophedrine and unit 2 for Statins like Lovastatin and Simvastatin. The complexity of fermentation technology is a real entry barrier into this industry .
                                                In 2004, Krebs posted a turnover of Rs.101 Cr ,net profit of Rs.13.5 Cr and an EPS of Rs.23/- Its misfortune started in the form of the  arrest of some people related with a narcotic racket overseas. One of the products of the company ‘Pseudoephedrine’ is used in medicines for cough and cold .On the other hand it can also be used to produce ‘Methamphetamine’ – a narcotic drug. After the above mentioned arrest ,the authorities tracks the source of  Pseudoephedrine which end with Krebs biochemicals. Even the company repeatedly affirm that they are selling the product only to the bulk buyers overseas and not aware  about the end users, the drug authorities cancelled the license for manufacturing  ‘Pseudoephedrine’.This incident badly affect the entire operations of the company and it moves to red. Its diversification to some unrelated fields also adds fuel to the fire.

Current Situation

Company is Shy to share information with any outsider ,so no chances to get direct information from the management about the new developments.. So I am  forced to make conclusions based on the available information’s in the public domain and certain assumption.Currently ,the day to day operations are  managed by Mr Avinash Ravi  son of the main promoter R T Ravi. Avinash is a Bio process Engineer from the university of New Southwales,Australia. He has done his project work in Fermentation and Laboratory Control from Suntroy Brewary, Queens Land, Australia and done his student Exchange Programme from University of Alberta .Canada. He is specially qualified in Production and purification of Biotechnology products Monoclonal Anti Bodies, R-DNA Products..etc. Now,company stopped its all non core activities and concentrating only in pharma business. For the past may years company posted losses and the reason as per the latest annual report  is the non operational status of  its plant 1 located at Nellore. Company also  expressed its optimism to find out some arrangements with big pharma companies to re start the production of Unit 1 . What catch our attention is the performance in the second quarter of current FY .In September qtr company doubled its turnover from Rs.10 Cr to Rs.21 Cr and reduced the loss from Rs.6 Cr to Rs.1.8 Cr . It is a fact that the skills of the promoters and infrastructure of the company is a big asset and it is not easy to replicate in an industry like Fermentation and Biotechnology . As I have mentioned in the beginning ,interest of two pharma majors is not a co-incident in this high entry barrier industry.If the latest financial performance is any indication ,some surprise may happen in this company by next Diwali. Don’t forget, all of these are depends on lot of  IF’s and let us hope  the old good days will come  back in future for Krebs .

Read Below some articles on the company  :

5) CENTUM ELECTRONICS              CMP RS 134.40/-           

Centum electronics is a Bagalore based company
promoted by Mr Apparao V. Mallavaravu and engaged
in the business of designing and manufacturing of
electronic systems,sub-systems and components.
The  Singapore based multi national EMS giant
Flextronics is also holding  about 5% stake in
Centum Electronics. Recently company merged another
company of the same management into itself which was
in the business of  Electronic manufacturing
Services (EMS) and Printed Circuit Board  Assembly.
The new entity’s products are used in industries
like Space,  Defense, Aerospace,Communications and
Automotive.It also have another  subsidiary in
the name of Centum-Rakon which is a joint venture
between Rakon Limited,New Zealand .Centum Rakon
is one of the largest  manufacturer of
frequency control products in India . Centum’s
main  business includes the manufacturing of
Signal Conditioners,  Multiplexers,
Relay Drivers, Power Processing Units,
Control Electronics  Modules,
Sensor Electronics Modules and Crystal Oscillators
including high-end SPXO, VCXO, TCXO and OCXO .
In India ,company is expecting
more  orders for their products and a bright
future due to the increasing  participation of
private sector in Defense arena .
Interest of  Flectronics in this company is
helping it to tap the international  opportunities .
Recently company got some big orders
from Alcatel and  Ericsson ,and it is planning
another factory in Bangalore to meet the improving
order flow from overseas.Flextronics is reportedly
planning  to invest another Rs.25 Cr in Centum
Electronics to increase the  capacity .
For the September quarter ended Centum posted
a turnover of  Rs.43 Cr , net profit
of Rs. 1.61 Cr and an EPS of Rs.1.30.Company
is  expected to perform well due to the revival
in western economies  ,increasing
interest of private sector in Defense and
Space in India, and new commitments of
Flextronics .Long term investors may
consider  at CMP of Rs.134.4/-

Wednesday, November 3, 2010


Asahi Songwon Colours Ltd is mid size Gujarat based 
company manufacturing different type of pigments .Company
having two manufacturing facilities one in Ahmedabad and
other in Baroda.Company’s product list includes Pigment Green-7 ,
CPC Beta Blue and Blue Crude.Recently company expanded its
capacity of all these products.Colouring
agents manufactured by company are used in industries like
printing inks,  paints,plastics, textiles,papers ,leather..etc.
Asahi also having a big presence in exports.Main raw material
of the company is crude derivative and a steady price trend
of the raw material is helping the company a lot in recentpast.
of the user industries are showing good growth and company’s
financial performance is also improving proportionately.
For the half year ended Sep 2010 ,Company posted a turnover
of Rs.88 Cr and a net profit of Rs.8.47 Cr .On an equity
base of Rs.12.2 Cr,half year EPS is about Rs.7/- Currently
it is trading at Rs.84/- with a P/E multiple of 5 on the expected full 
year EPS of Rs.16/.Benefits of the expansion plans will reflect from this FY 
onwards. One may BUY on decline for medium to long term.
Another group company's (Akasharchem) inconsistent performance is
the main reason for worry.

Monday, November 1, 2010



Amrit Banaspati is a 40 year old vegetable oil company based in Rajpura ,Punjab.
Company is selling edible  oil from Groundnut, Cottonseed, Rice Bran, Soyabean, Mustard, and Sunflower . Company’s different products are marketed under the  brands ‘GINNI’ ,‘GAGAN’and  ‘ MERRIGOLD’ .Company is mainly operating with three products categories, viz – Lifestyle Products, Premium Products and Consumer Products. Under the lifestyle products category  ,company selling GINNI NUTRI DELIGHT NUGGETS, MERRIGOLD TABLE MARGARINE and MERRILITE vegetable fat. Under the premium products category ,it is offering GINNI GOLD REFINED SUNFLOWER OIL, REFINED GROUNDNUT OIL, REFINED COTTONSEED OIL and REFINED RICEBRAN OIL  . Its offering under Consumer products category includes GAGAN VANASPATI, GAGAN GOLD VANASPATI , GINNI PLUS REFINED OIL , GINNI REFINED PALM OIL , and GINNI REFINED SOYABEAN OIL.  Company having a good dealer network of 1400 dealers  in 850 cities across India .Its products are well established and having good brand loyalty . Since major part of its raw material ( Crude Palm Oil) is imported from foreign countries, considering the current  exchange rate scenario, company is in a good position . Company posted a turnover of Rs.235 Cr in latest qtr with a net profit of  Rs.4 Cr . It is expected to close the full year with an EPS close to Rs.18/- .One may consider buying in small lot at CMP of Rs.114/-

Sunday, October 31, 2010


Earlier Recommended as a BUY @ Rs.80 and BOOK PROFIT above  Rs.125/-

Reiterating BUY @ CMP of Rs.99/-

Roto Pumps started its operations in 1968 as a
producer of progressive cavity pumps , whose
demand met by import till then.
Company  also producing Twin Screw pumps and
Centrifugal pumps in its two most modern facilities
located at Noida.Roto distributing its products
around the globe and it has marketing offices in
Australia and UK. Company also having
strong marketing network in India.Progressive
cavity pumps are used to pump liquids with high
solid content and flow needs to be controlled .These
type of pumps are generally used in industries like
Beverages,Pharma,Food processing,dairy,Effluent and
sewage treatment and mining etc..Other type of
pumps made by the company are used in sectors
like irrigation,agriculture..etc. Half of its sales
coming from export and this itself is a testimony
for the quality of Roto’s products.Roto is going
through a capacity expansion programme and the
benefits of it will reflect in the near future.
Now company’s customers are posting good business
which will help the company too.This is one of the
cheaply valued listed player in this sector compared
with KSB Pumps,WPIL,Kirloskar Brothers,Sakthi Pumps
..etc . Roto has  a tiny equity base of 3 crore where
promoters are holding almost 70%.Last year company
posted a turnover of Rs.52 crore and a net profit
of Rs.3.3 crore and an EPS of RS.10.7 .On a continuous
basis ,for the past four years company increasing
its sales and net profit.For the Six month ended
September 2010 ,Roto posted an EPS of Rs.8.80/- 
A good Buy for long term at CMP below Rs.100/-
Raw material price is a major factor to watch.

Saturday, October 30, 2010


Aries agro is one of my earlier recommendation @ Rs.108/- .After touching a high of Rs.203/- ,now it is quoting around Rs.159/- .In the latest September qtr ,company posted healthy growth in top and bottom line.The good monsoon we got in this season is also expected to boost company's prospects.Long term investors can still BUY it at current rate . In my previous report ,I have mentioned the efforts taken by the company to introduce their products to farmers from remote rural areas by using Krishi Vigyan Vahan (KVV).Below is a small write up published by WALL STREET JOURNAL about this initiative:


Fertilizers on Wheels

It's a few hours before sundown when a white and lime green truck rolls into Vanukuru village, located in the south eastern Indian state of Andhra Pradesh. The squeaky clean vehicle, equipped with a flat screen television and a loud speaker, stands out among old, grimy shops at the town center where it's parked. The truck, named "Krishi Vigyan Vahan," which means farmer's knowledge carrier, soon draws a crowd of about 40 farmers who have just returned from the fields. Before long, a shaded booth displaying a colorful array of fertilizer products is set up. Then, a video starring local film stars promoting fertilizers is screened on the television and blasted through the loud speaker.

As the crowd begins to grow, a marketing agent from a fertilizer company starts talking about the importance of zinc, iron, boron and other micronutrients to plant growth, plugging his products in the process. He is flanked by two other company representatives, a loyal customer and a village sarpanch – elected head of the village – who lends his legitimacy to the promotional event.
This scene has been replicated in more than 2,600 villages and satellite towns across India. It is part of a marketing strategy by the Mumbai-based fertilizer company Aries Agro Ltd. to tap into new markets which are the remote rural areas that do not have fertilizer retail stores and where there are improved irrigation systems.
Since its launch in June, Aries Agro, which focuses on micronutrients but also produces secondary nutrients and packaged water-soluble primary fertilizers, has rolled out more than 70 such trucks across the country. The trucks are tracked via satellite and the data -- net weight, distance covered, time spent at each stop – is compiled daily at the Mumbai headquarters.
"By actually going on the mobile format, which is basically my rural retail vehicles, I'm covering six to seven villages a day. So my cost is getting spread over six or seven villages, rather than an entire investment on physical infrastructure in one village," says Rahul Mirchandani, executive director of Aries Agro. The company has so far invested 48.80 million rupees ($1.05 million) into the vehicles and has forked out another 34,000 rupees towards operational costs per vehicle each month.
Aries Agro, a medium-sized fertilizer company, has a production capacity of 84,000 tons of micronutrients and 60,000 tons of secondary nutrients and water-soluble primary fertilizers per year. Last year, the company made a net profit of 57.12 million rupees.
Primary fertilizers consist of nutrients such as nitrogen, phosphorus and potassium that are needed in large quantities for plant growth, while secondary nutrients such as calcium, magnesium and sulphur and micronutrients such as zinc, boron, iron and manganese are used in smaller quantities.
India is one of the largest producers of primary fertilizers in the world –second largest producer of nitrogen after China and third largest producer of phosphate after China and the U.S., according to the Fertiliser Association of India or FAI. From 2008 to 2009, the country produced 33 million tons of primary fertilizer products. The estimated total consumption of primary fertilizer products in the country increased from 45.96 million tons in 2007-2008 to 50.8 million tons in the last fiscal year. There is more demand than domestic supply of primary fertilizers.
As for micronutrients, the annual production of zinc sulphate alone was about 88,000 tons in 2008-2009, according to FAI.

"I used to travel (to the fields) during the agricultural season and I see the demand (for micronutrients) is increasing," says Kanak M. Sarkar, president of the Indian Micro Fertilizers Manufacturers Association, adding the increase in demand stems from years of product demonstrations by fertilizer companies.
According to Mr. Sarkar, in the recent years, large primary fertilizer companies have noticed this and are also entering the market, competing with 400 to 450 smaller micronutrient companies in the country.
"We have to fight this problem. I cannot foresee what will happen in the future. (But) we cannot just leave this field open for them," says Mr. Sarkar.
But for Mr. Mirchandani from Aries, larger companies entering the micronutrient production business would only expand the market and create more demand. Smaller companies, he says, would however, have to provide value-added bonuses to their products in order to compete. For Aries, it's letting farmers book for products off the truck and providing accident and health insurance coverage for purchases -- a 50,000 rupees coverage for a purchase worth 1,000 rupees.
"It's useful to buy (from the truck), because we are getting a receipt, insurance coverage and the product for 1,000 rupees. It's worth it," says Nellore Chandramouli, a 52-year-old farmer in Vinjanampadu village in Andhra Pradesh.
But the vehicles are still a substantial investment -- more than eight times the cost of outsourcing promotional programs through an external company. Aries spent about a million dollars on the trucks this year and $122,508 while outsourcing promotions last year. Company executives say promotions when outsourced, were smaller in scale and had less reach to remote rural areas.
Coromandel Fertilisers Ltd., one of the big players in fertilizer production in India, spent about 500 million rupees in setting up 412 retail outlets in Andhra Pradesh, selling fertilizers, pesticides, veterinary products and household items. The venture has since brought home 2 billion rupees in revenue in the last fiscal year. Company representatives say they expect the retail stores to break even in 2010.
"The breadth of Andhra Pradesh is being covered by these centers now. We're moving now into Tamil Nadu, Maharashtra and Karnataka in the years to come. So the idea is to get direct retailing to the farmer," says V. Ravichandran, managing director of Coromandel Fertilisers.
In addition to its retail stores, Coromandel Fertilisers, which has a manufacturing capacity of 3.1 million tons per year of fertilizers, has also been marketing its products by sending vehicles to remote parts of Andhra Pradesh. The company has a ground staff of 1,200 individuals connected to villages throughout the state.
But be it via retail stores, trucks, farmers meetings or media advertising, fertilizer companies, big and small, primary, secondary and micronutrient producers, agree that having product demonstrations is the key to selling new products and expanding the market.
"We believe in approaching the farmers directly," says Mahesh Gopal Shetty, director of the Karnataka-based Multiplex Group of Companies, which produces micronutrients, bio fertilizers, organic manure, pesticides and bio pesticides. "Seeing is believing for these guys."


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