Complete Agri Play through Godrej Industries

(tbhavesh) #41

something is fundamentally wrong.

  1. If things got pushed out from this quater, was there anything that got pushed in from prior quater?

  2. Should the company not disclose the value of items that got pushed out so that share holders do not get jittery on the number variations?

(Marathondreams) #42

Godrej Agrovet Investor presentation for Q1 FY 19 results.

See the comment about deferment of sales for Astec. May here more clarification on tomorrow’s concall…

(Marathondreams) #43

Interview from Balaram Yadav of Godrej Agrovet

(Sarabjeet Singh) #44

They are planning amalgamation of Astec with God.Agro.

Is it bad or good ?

(s) #45

Depends on merger ratio. Either way management remains the same. Agrovet recently bought Cream line dairy, Israel based biotec firm maxximilk. Company knows to chart its future. Essentially Godrej agrovet is going to be a strong play with backward integration and direct market presence. Merger does help in removing inefficiencies in multi structured company format.

(Marathondreams) #46

Personally I don’t like it… I purchased shares of company focused on agro chemicals and now I will be forced to become (unless I sold my shares) shareholder of company having multiple business lines (conglomerate). This takes away most of upside in the share price.I like demergers where bigger company splits into smaller units which unlocks value as it brings sharp focus and accontability… This is opposite of that.

In all Godrej Agrovet’s businesses, I think Astec will continue to do very well in future but being part of bigger company, it may not contribute to the shareholder returns as other businesses may dilute the margins. Having said that, I am sure some shareholders will like it as it will derisk the company due to presence in multiple sectors(animal feed, dairy, Palm Oil, pesticide,herbicides etc). But now investment in this company will be like investing in Mutual Fund :wink:

Another view could be Astec will become part of larger i.e better market cap company with Godrej name. So it may increase liquidity in the counter…

Will need to wait to see merger ratio but market reaction says it all… I will be waiting to see what happens next

Disclosure - forms 10% of my portfolio

(Sarabjeet Singh) #47

Seems like market too didnt like the amalgamation ( big fall with huge volume) . Many investors ( including me) would have bought for pure agri chemical play.
If I remember in last quarter conf call or some recent interview , Godrej promoters had mentioned to run Astec as separate company… then why such sudden change in plans.

(s) #48

Market is assuming 1:1 seap ratio which is highly likely. Which also seems to be the reason of fall. Astec was a niche play. Godrej added it at 550 and agrovet ipo was 460. There could be a little tradeoff. Coming up results will determine if the premium is going to be maintained for Astec.

(Marathondreams) #49

11 shares of GAVL for every 10 shares held for Astec. I would say fair swap ratio.

Dilution argument remains… so positive for short term for Astec but Negative in long term for Astec as well as GAVL shareholders …