JK AGRIGENETICS - TREASURE HUNT

JK AGRIGENETICS  is a member of JK group companies

established in Hyderabad in 1989. Earlier it was

part of JK Tyre and Industries and later de-merged

into a separate company.This company is engaged in

research and development, production, processing

and marketing of hybrid seeds of Sorghum, Pearl

Millet, Maize, Cotton, Rice, Sunflower, Tomato,

Okra and Hot Pepper. Products are selling under the

brand name 'JK SEEDS'.Company is collaborating

with various national and international

agricultural universities for bringing latest

technology in seed development.In 1999

company set up a Bio tech lab of international

standards at Hyderabad with 15 scientists .

Its Hyderabad plant having a capacity to process

100 ton seeds per day. Company is selling seeds of Cotton,Bajra,Maize,Jowar,Paddy ,Sunflower,

Castor,Mustard,Wheat,Redgram and Soyabean.It also

producing seeds of vegetables like Tomato,Bhendi,

Chilli,Bottle Gourd,Water Melon,Radish,Cabbage,

Sweet Corn,Cucumber and Coriander.Company has

recently started production from Phase 2 of its

new seed processing plant in March 2010.

Due to adverse climatic conditions company's sales

badly affected in last year and company posted

huge loss.It is expected to perform better ahead.

THE REAL ATTRACTION

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In 2006 ,company planned to de-merge  into two

- Seed division and Investment division . When we dig deep

into the investment division it is amazing to see the

value in it.This division holding shares of JK Lakshmi

Cement(Total current Market value Rs.45 - Crore),JK Paper

(Rs.38 Crore) ,JK Tyre( Rs.99 Cr.) ,Umang Dairies (Rs.3 Cr),

Bengal Assam Company ( Rs.13 Cr).Other than this it also

holding shares in unlisted companies like Fenner India,

Udaipur Cement,Florance Alumina ..Etc. All together its

investment portfolio worth over Rs.200 Cr in current

market price. Remember, its total shares issued are

only 3,506,510 and when we divide its investment

portfolio for these share ,what should be the value

of each share of JK Agri.(Approx.Rs.570/- each) Anyway

company's plan was to de-merge it in a manner so as

a share holder will get 60 shares of seed company and

40 shares of Investment company. Company's proposal was

earlier rejected by Court due to complaints by some

share holders, and company now filed an appeal to the

division bench .This petition is expected to come for

hearing in this month itself . It is expected that Company

is planning to de-list the investment company after

de-merger . I believes If such a reverse book building

happens ,one can recover entire investment (at current

rate) by just surrendering the shares of investment

company alone and keep the shares of seed company

cost free. In nut shell at CMP of Rs 170/- you are

getting a company from JK group operating in a high

potential Agri sector plus part of 200 Crore investment

at a market capitalization of just 59 Crore.

KAVERI SEED COMPANY -Future Perfect.

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/-