Aimco Pesticides’ Story is unfolding to be a good turnaround anecdote. However, it has been difficult to spot the key driver behind this turnaround just by going through the past Annual Reports.
Company does mention about its strategy- of introducing newer and safer products, new registrations as well as entry into new markets and expansion of business in existing markets. But, there is no specific detail available with regards to the market or the product which has caused the change of fortunes.
There are several interesting points which I came across while going through Aimco’s financials on screener and preliminary reading of past Annual Reports.
Requesting the members to share their views or any information that is available, on the points below:
1- Post OTS scheme in FY13, company has been able to earn profit every single year at operating level.
2- In FY16 & FY17 the sales are down almost 40% as compared to FY15 but the profitability is inching towards all time high. It is important to learn the reason behind this shift. Did the company discontinue any operations that was earlier being a drag on its overall results?
3- As per AR16 Aimco will upgrade its manufacturing facility and add new molecule. And in the FY17 b/s FA has doubled and there is further CWIP. What is this new CAPEX? Is it just a replacement of old plant or an introduction of new machine to cater to the new products? An understanding on this front will help investors take a call on the sustainability and future prospects of the company.
4- Promoter Holding has been increasing for past few years. This is a +ve sign.
5- Which is Aimco’s major export market and its major clients? What kind of contracts does it have with them? (AR just mentions Brazil as a promising export market. No quantitative data is provided.)
6- Finally, where do we stand with regards to our BIFR proceeding?
Disclosure: Not Invested