The list u put up extends to some more pharma companies like etc., Housing finance companies etc, manufacturing/consulting companies like newspaper companies etc. Kitex is under my watchlist. I would want to watch it for any improvement in business fundamentals.
India “not scared” if Monsanto leaves, as GM cotton row escalates -
U.S. seed company Monsanto is welcome to leave India if it does not want to lower prices of genetically modified cotton seeds as directed by the government, a minister said on Wednesday, in a sign the rift between New Delhi and the firm is widening.
In case if monsanto leaves india…what could be the potential effect on Kaveri seeds…Does that mean they will loose all the cotton seed business…which makes around 70% of the total revenues…Please some one answer this if I am interpreting this wrong
KSCL management had said in the concall that the forensic audit initiated by SEBI was a routine matter. SEBI response to RTI request - Has initiated only 2 forensic audits over the last 3 years (including KSCL). Seems like SEBI rarely takes such a step.
But the reply from SEBI and KSCL is contradicting.
KSCL is saying it is a “routine matter” but SEBI’s reply implies it is a “rare event”. Now I understand it is upto us to seperate the “Chaff”, but I am concluding that the doubt on KSCL is still unresolved.
Area under sowing for kharif cotton crop is down by 20% while it is up for almost everything else as of July 15 2016 (Source ministry of agriculture). However, total sowing area is up by 4% this year compared to same period last year. Looks like farmers have switched from cotton to pulses and other cash crops. Monsoon is also delayed this year. that will push some seed sales to July from June. This will impact June qtr sales which is a major qtr for Kaveri.
If June qtr results are bad stock will take a beating. No news on SEBI audit yet. So that’s another overhang.
Thought of sharing this article in todays ET (20/Aug/16). The landscape for GM seeds appears to be very large…it covers maize, soyabean, cotton, potato, canola, papaya, alfalfa and squash. And there would be many more to come.
From the article one can deduce that Nuziveedu seeds equation with Monsanto has soured significantly. Wondering whether - Once the Monsanto - government issue is resolved…would it be a significant advantage for Kaveri Seeds?
This is not a good news for Kaveri. 70% of their sales come from BT cotton and they and other seed companies depend on Monsanto for developing new varieties of seeds to protect against pests that develop resistance to existing seeds.
Earlier this year, govt put price controls on private royalty price arrangement between Monsanto and seed companies. Monsanto had threatened to pull out of India. Govt has since withdrawn the order but Monsanto is still pulling out.
If not from Kaveri and other Indian seed companies in similar position, then from where will the farmers buy cotton seeds? So this should be bad for all Indian seed companies. The farmers might shift to other crops and that should be a big push for cotton prices.
Going by the tough stance taken by the government, hoping that they have the indigeneous solution for this around the corner.