It is indeed good to see some hightened activity in PIIND thread but it is an unfortunate part that discussion is largelly revolving around price performance/underperformance rather than actual business dynamics and how they are shaping up on ground.
– Is the basis which supported exceptional wealth creation so far for PIIND is challenged ??
– Is there something which is challenging the exceptional de-risked business model that management has built over last two decades ??
– Are there any visible signs that company is going to be a laggard in domestic Agri space ??
– Is CSM space showing any signs of saturation which could hamper growth over medium term ??
– Is the company which has so far built everything organically, showing any signs of organic growth tapering off and company incapable of taking any corrective inorganic moves on first signs of anything like that happening ??
If answer to above questions is a clear NO then should short term price volatility matter to a genuine long term investor ?? Then the question arises, as is widely discussed recently in this thread, that if all the fundamental basis are intact then why share price is depreciating the way it has seldom depreciated in company’s entire trading history. Afterall we all are aware of a truth that ‘Market is Always Right’ and it discounts many things in advance which might be beyond sight of many of us atpresent. However, we need to understtand that this is true in the long run and 1-2 months is not a long term indeed. I see that some are raising questions on commentry of a soft H1 even when order-book of CSM is 1 bn. USD ; its a order-book which gets translated into actual revenue when actual delivery happens and its the product-offtake that is going to get postponed because of high inventory in the system atpresent.
Every segment goes through a cycle and this is that stage of cycle wherein markets which were filled with high inventory are slowly getting into shape and by 2019 again a stage might come wherein refilling into the system might become a necessity. Now, why this thing is not discussed that on a larger and much stronger base (relative to 2009-10), when such thing happens, how large beneficiary PIIND CSM segment will be ?? Its a habit of market and market participants to justify appreciation/depreciation of share price of a company by touting many theories. When PIIND share price reached 900+ theories for 1100 price came about and it is no surprise that when PIIND share price has reached 700- theories for 600- price are coming about.
This is not to say that any of the theories that are or were wrong at that particular time but the question is that, for a genuine analyser and investor who thoroughly researches a company, its business, its management, does such theories really matter ?? If conviction of an investor gets challenged by such theories in a wealth destruction phase or gets swayed by such theories in wealth creation stage, was that conviction a real conviction at first place ??
No doubt every analyser/investor has to be alert and keep his ears on ground to constantly reassess the basis he has made at the time of investment asto whether the story is going on right track as expected by him in the beginning or not and such contradictory moves of share price underperformance in a general outperformining maket is a perfect time for alertness. However, we need to look for real answers to our real questions rather than only looking for answers for share price depreciation thats what I feel.
Having said all these, I must admit that I have no argument to make on certain minor concerns as raised by some genuine market participants (who smell a facilitated stake transfer/sale) like why AGM was delayed after announcing the same on a particular date, why Annual Report is still not out even when less than one month is remaining, etc. However, evenif such concerns were genuine then also it doesn’t affect the long term basis and such moves are widely adopted by many high caliber managements also.
Let’s see how today’s Q1 results shape up.
Discl. - Invested in PIIND