Aries Agro - Micronutrient player

(Investor2025) #24

Vijay kedia bought 2.9lac shares at Rs.199.89 now he holds more than 7% stake in aries agro

(arvind.calyx) #25

Can anyone make me understand how these big transactions take place ? when the share price is constantly changing ? Doesn’t it show a fake volume on the chart ?

(Investor2025) #26

I guess if management involved in this transaction then it concerns but all this names had nothing to do with promoters …
Aeries has one of the most transparent management…
Whenever the volume spikes such punters will come and make transactions at 1 rupee difference…
Based on thet we as a long term investor never takes any decision…

Disc. Holding since 15 dayz

(SkyWalker) #27

Sometimes, such transactions are done for capital gain tax purpose, like STCG. As long as parties involved are not fraudulent and ownership remains intact, that can be ignored. Just google on the parties involved to see if any adverse information.

(Kumar Saurabh) #28

Does anyone has idea of following

  1. What is the market size opportunity - Domestic and Export
  2. What is market share of aries n competitors
  3. What is expected market size growth rate, catalysts and deterrent to expected growth rate
  4. Does this business has any barrier to entry apart from distribution network. What I understood from AR is for a player of this scale , setting up such a distribution would take longer time and bigger players will not be interested . Anything more specific ?
    Without these questions answered , analysis would be half baked and we have not yet discussed these things,so, request all interested parties to put their views. Will update if I get to find something

(Investor2025) #29

Corporate-Presentation-Aries-Agro-Limited-October-2014.pdf (1.4 MB)

(Investor2025) #30

Please see the attachment given by the company you might find some figures.

What i personally understand is
1)AR is a market leader in micronutrients which had very low awareness but now people started using it.
So now AR s 35 years hard work will start giving returns.
2)Very Transparent ,Hardworking, reasonably passionate management and young CEO from harward.
3)Strongest dealership network pan india present.
4)Global present with substantial manufacturing capacity they have invested 60cr in UAE based unit.
Sales and distributors network in more than 15 countries.
5)Stock available at reasonable valuations still 300 cr mcap.

Disc: Invested with avg of 192 contributed 33% of my folio.

(Investor2025) #31

This is not my personal research but i am following Mr.Vijay kedia whole picture is given by him only.
Correct me if i am wrong anywhere…

(Arpit Jain) #32

Are you sure the CEO is from Harvard? Last I checked, he wasn’t. I am not disregarding his enterpreneural capabilities in any way though.

(Investor2025) #33

Thats the only point where i am not sured …may be read some where …

(Raminder) #34

But then this industry has no entry barrier no moat and is a kind of one working on procuring various chemicals, mixing and packing them.

(Raminder) #35

Hi Arvind,
I found this old article on the net which you may find relevant.

(Investor2025) #37

Please forgive me friend…thats not the point of discussion…please give some valuable inputs if u can …i guess what unique they had is 1) products 2)distribution channels 3)Healthy management 4)Reasonable valuation 5)They r catering to almst 200000 villages.

(Raj) #38

Rahul Mirchandani Chairman and MD holds a Doctorate in Management Studies from NMIMS University, Mumbai and is also a Chartered Financial Analyst (CFA) and holds an MBA from the University of Canberra, Australia. SOURCE: aries agro website

(arvind.calyx) #39

Promoters are benefiting from the listing of Godrej agrovet, you can see slight jump in all companies having name “AGRO” in them !
I think some companies changed there names to agro or financial etc.
Recently you can see continuous uc in maan aluminum just because hindalco/nalco moved due to alumina price appreciation and on speculation of future alumina price.
I can tell you numerous examples of such things right now in the market.
Lets see how it plays out for these people.

Not invested in Aries agro, reason’s:

  • Company has low interest coverage ratio.
  • The company has delivered a poor growth of 2.50% over past five years.
  • Company has a low return on equity of 7.76% for last 3 years.

(Investor2025) #42

Corporate-Presentation-Aries-Agro-Limited-October-2014.pdf (1.4 MB)

(Investor2025) #43

(vij) #44

Any source about modi encouraging micronutrients or was that your personal spice?

(Investor2025) #45

Vij read this properly…

“AA is the leader in the micronutrients space. One of the biggest priorities/challenges worldwide is to increase the yield per acre of arable land. Arable land is always in limited supply so governments of every country are trying to figure a way out to get more from the same space. This makes the business a very important one, giving me some confidence on the sustainability of it. As per my understanding of the business, it has a small but expanding moat. The distribution network has been painstakingly created. The management has, over the years, gone state by state, village by village to create awareness. It now has a very large distribution network, covering almost every state in India. Farmers did not know what they had been missing out on by not using micronutrients. This has been a very tedious job. There is no easy way for even a large established player to replicate this. Farmer education requires time, money and effort and AA clearly has the headstart here.
One of the biggest problems the company faced was that it has to customize its offerings for every state. So the number of SKU’s needed were extremely high. Also they received money at a later date, even though sales had been effected. These factors put together, made it a working capital heavy business. The success of ‘Flash sales’ could change the balance sheet of the company forever. For the first time in the history of AA, it has an order book to work with. As per the disclosures on the BSE website, they targeted a 100cr orderbook but ended up with more than 200cr. Being present at the event, I witnessed first hand how a Flash sale works. Apparently the event has been picked up by the Limca book of records as the largest order book by an agri company in half hour. The event was created to offer good deals to distributors of every state in return of advance bookings. Also they were given due recognition with their names being announced and awards being handed out to them. They were about 400 people from across the country. One could sense a closely bonded community of people in the room. I decided to speak to some of the distributors. Few of them said that people ask for a Aries product by name and that the products were indeed of great quality. Since micronutrients have a very favourable cost to benefit ratio, it would be easier for brands to sell over generic variants. The overall sense I got was that the distributors were happy to be associated with Aries and they have been treated well over the years. While the two main products are agromin and chelamin, a distributor mentioned another product called Nobomin (not entirely sure if this was the exact name), which he mentioned has great potential, given that i has applications across different fruits and vegetables.
I also sensed from the distributors that the internet and smartphones were being of great help in recent times. Apparently, farmers have created “WhatsApp” groups to share information in their local language, and DIY pictures…Apparently even orders are placed through the group. The main distributor is like a doctor who prescribes the ‘kit’ needed for individual plants/soil conditions etc. Lack of awareness of micronutrients has so far been the biggest issue. This sort of communication would help bridge the knowledge gap and help create the awareness. Add the help from the new direct benefit schemes, etc. Also I understood that since Urea has been subsidised by the government, farmers tend to overuse it. This spoils the soil and also plants do not end up getting the other nutrients they deserve…In case, the subsidy on Urea is ever lifted, it will greatly benefit AA…”

If farmers starts using micronutrients then their dependency on urea will decrease which ultimately reduces subsidy burden to govt. Thats why pm modi promoting micronutrients…

(Investor2025) #46