I have been accumulating it for some time. I have mentioned about my holding status in the thread for the personal portfolio. For personal investments, let’s not use the company-specific threads.
As far as my views about astec are concerned, my views are mixed, and here’s how I see it:
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It’s a bet on the assumption that management is good. Often managements seem good until they become bad. I would rate the management once I start seeing a couple of quarters of execution.
(Just because management has worked in the past doesn’t mean they are going to succeed again. This happens everywhere - as even the World XI loses the match.) -
I don’t have a view of the margins. It’s too soon. Let’s see what management guides overtime.
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There are concerns about how Agrovet will manage Astec along with other subsidiaries. The track record of the Godrej group does give some confidence here but concerns are there.
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I am curious/uncertain if this ends up being a LT story or just a 3 to 5-year journey. For now, I do not see this as a hold and sleep stock.
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When I compare the unknowns/risks, and the valuation of ~1500/1600 market cap which could have a limited downside from there (unless the earnings get eroded further), I can NOT see Astec as a screaming buy.
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So what gave me the confidence to buy? I am interested in the agriculture industry as a whole. The opportunity size is large and there has to be growth in this sector. The group is unlikely to con me (
). The valuation isn’t cheap but could have a limited downside while the potential upside is catchy. Management’s guidance is interesting and there are triggers for growth in the near future. The time value of money seemed rewarding. I had cash and this felt like taking a small position. -
However, investing in Astec is going to be on serious assumptionns/hypotheses. The moment my hypothesis/assumptions get challenged OR I find a better use of cash, I would evaluate reallocating/cashing out. Another question I am looking to find an answer to is: Agrovet v/s Astec: which is the better way to ride this journey?
Disclaimer: I may or may not be invested in any of the names discussed above. I am not a SEBI registered advisor or analyst. This is my personal view and not a recommendation. I am often wrong and do change my views without being able to inform anyone.