Sunday, August 1, 2010

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.

12 comments :

  1. Yes you are right,this company is a multibagger even from this level

    ReplyDelete
  2. Hi Valuepick

    All together this company is a nice one.But you have mentioned it three times here.Any special reason for your confidence? ,any new developments in it ?
    Please clarify

    Sunder
    TN

    ReplyDelete
  3. deal value pick ji
    what is your suggestion on sabero organics?
    which is in crop protection bussiness.
    will it be the next Bayer?
    will it be a multibagger from current level?
    awaiting your valuable reply.

    ReplyDelete
  4. dear valuepick ji, i expect your view on ASSAM COMPANY sir? is it a good buy for longterm sir?
    And your views on INDAGE VINTNERS recent news...i am ready to take risk if it is worth taking...will it really emerge as a great player as before?
    thanks in advance sir
    senthil

    ReplyDelete
  5. Dear Sunder

    I have already given the reasons for my confidence on Kaveri seed. In a recent development company ,through its 100 % subsidiary planning to start new businesses of cold storage chain(to keep vegetables) and green houses/poly house for starting cultivation of vegetables meant for exporting to European countries.For this project ,Kaveri already signed an agreement with Israeli firm Netaphim. In nutshell company is expected to shape as a completely integrated agri company having operations in - seed,bio fertiliser,bio pesticides,farming,processing and exporting - in near future.With promoters from agricultural background I expect Kaveri seed along with Jain Irrigation will lead the Agri theme in Indian stock Market going forward.

    ReplyDelete
  6. Sabero organic's latest result is not upto the mark.May get some more valuation but don't compare with Bayer.

    ReplyDelete
  7. Dear Senthil

    In case of Assam company ,if u look at it as a tea producer,there is other better options.In case of oil side ,the dispute between conoro resources and Assam company is a worrying factor.Take a decision after knowing the outcome of this case

    ReplyDelete
  8. DEAR NALUE BUY
    I HAVE SREE RAYALSEMA ALKALI LTD (BSE 507753)
    FUNDAMATEL ARE VERY STRONG
    POWER PROJECT ARE RUNNING
    CMP 13.25
    PERMOTER STAK 38.5%
    IDBI & IFCI STAK 35.25%
    COMPANI PERFORMANS ARE VERY-2 GOOD
    THE VALUE BUY STOCK
    IDBI & IFCI ARE SALE STAKE - WHAT RESION ????
    PLESE TELL ME

    ReplyDelete
  9. WHAT YOU SAY IN SHREYANSH IND LTD (516016)
    PAPER IND ARE STRONG

    ReplyDelete
  10. Dear Raj

    Image of the promoters of Rayalseema Alkali is not so good and latest financials are also showing negative growth.IDBI and IFCI are selling their stake now . So there may be some upside after their selling is over ,but don't expect more.

    ReplyDelete
  11. Dear Manish

    Even in a good time for paper industry now ,company is a laggard

    ReplyDelete
  12. sir

    what would you advice on srei infra should i buy at current level
    advice on kaveri seed at current level

    thanks for advice on jk agri

    ReplyDelete

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