Bambino Agro-Horse inside the stable?

5-7 years ago, an early part of my investment cycle, happened to invest in DFM Foods @50 and Tasty Bite Eatables @40 but due to lack of market interest and illiquid traits, exited both inspite of fundamentals speaking another story. Today they both have become 20 baggers and am wondering that inspite of repeated entries into this two Packaged food players, I could somehow not figure out the value proposition maybe due to lack of understanding on this front. Today, I stand on a similar kind of packaged food player again which seems hid deep inside the stable. The company which is Bambino Agro(Mcap-78 crore) ,known for its pasta packets, has not grown that aggressively and its financial performance have been nothing but variable. Lack of consistency is thus affecting the valuations as well as the future projections. But are the current valuations, low enough to consider the stock?

Source: AceEquity

Management holds majority of the company but is not that upfront in answering any questions. Lack of trading volume generates a lot of risks and only a thorough analysis should entice anyone to buy.Have just started looking into this company and anyone who has looked into the company would like to hear from them. I would update my further analysis once it’s done.

Discl- Recently invested.

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Bambino from Nacroni , pasta and macroni has now started manf and selling Ready to make Soups, Gulab Jamuns and other Mithai,and also various kinds of Namkeens.
To cater to the growing demand, Bambino has setup 5 factories at strategic locations (Hyderabad - Telangana, Bibinagar – Telangana, Bhandara - Maharashtra, Indore - Madhya Pradesh, and Gurgaon- Delhi NCR). These factories have ultra-modern facilities and they are equipped with sophisticated machinery imported from all over the world especially Europe.
It has a sales turn over of around 275 crs yearly and with a strong brand presence in South India is available ata Market Cap of only Rs 85 crs i.e. at 0.30 times its sales which itself is very cheap for a consumer product co.
Looks interesting.
Only problem seems that the shares are in T to T although promoter holding is around 74%.

Pl share your thoughts.

Disc: Looking to buy into it.

some years back i was invested at 30 odd rs exited was not able to get conviction on promoters but see its a 3 bagger from my price - not able to get much info or conviction on promoters

Management conviction is one of the big issues here. Also the expansion
plan, not much to speak of. Risk/Reward though seems favourable at double
digit market cap and as you pointed 0.3 mcap/sales for a consumer company
is not normal. Few more quarters of consistency would change that stat.

any new insights on this counter?..

enterprise value at 0.6xof annual revenue looks attracting and they have posted qoq increase in profit.

Any idea why the Chairman and Managing Director have resigned?

I guess he gave it to his sons.I dont know why this stock is quoting at low price.Atleast it should be valued at Rs.250.I have seen price of tasty bites moving from 150 levels to 4500 with in no time.

1 Like

Bambino has multiple drivers going ahead-

  1. Management restructuring is in place. The company is now in control of M Raghuveer and M Kartik who has also been inducted on the board.
  2. Company has cancelled related party transactions to save on tax and also for corporate governance reasons.
  3. Topline growth has been muted due to focus issues. But now with closure of high cost Indore plant and renewed focus, growth should likely resume. Also, commodity prices for wheat etc are likely to remain low due to global over supply
  4. Products are mostly low value items such as Vermicelli and Macaroni pasta which sell for Rs15/Rs20. About 5 lakh packets are sold on a daily basis. Very few consumer companies have such penetration
  5. Working capital cycle need improvement as inventory levels high which is likely due to long product shelf life of 24 months
  6. Very good brand recall, most housewives in India have used the product and one packet is enough for an entire meal for the household
  7. Company had sales of Rs275cr and MCAP of Rs150-160cr is very low compared to peers. The entire peer group trades at 5-6x sales multiples.
  8. Also, company spends about Rs1cr on R&D to develop lifestyle products such as diabetic rice etc.
2 Likes

Some issues remain

  1. Past 20 years 3-4 times financial year changed. May be management wanted to window dress accounts or due to the heavy debt and negotiation with bankers it wanted to present a better picture,
  2. OTS settlement, Management loan converted to equity, it could have been waived off. Still conversion to equity was fine but not the best solution under any circumstance.
  3. New management in place and lot of good happening but other private companies of the director still an issue. (Focus)
  4. How does the company plan to compete with giants like MTR and Nestle and move to a lower debt model…It not only manufactures Vermicelli, other products also. Though this plan may be addressed…Management issue is a bigger problem.,…It will be great to know more about the new management…

I see that related party transactions are very high numbers compared to sales. Will it come down this year?

Bambino Agro has informed about sudden demise of Shri M Raghuveer, Chairman and Managing Director on 25 June 2017

Heard they are planning to sell the company.If any body has updated info kindly post it.

Hearing is not enough. No trace of any such activity as far as I know.

There are too many RPT in this scrip for me to be seriously interested - it looks like promoters are only trying to create wealth for their sister entities via RPT purchases at high prices leading to losses for listed arm, and slump sale of assets to related parties at undetermined valuations.

3 Likes

Any current updates about bambino , it is almost 3 years no news or activity about this stock . Anyone still holds or everyone exits ?

Bambino Agro Industries Ltd. is quite interestingly poised at current juncture :

– Succession is the primary interesting point wherein company is going to be run by persons who agewise are in their 20s or otherwise the company is going to get sold off to some strategic investor. Current Chairman & MD Mr. M. Kishan Rao is now 84 years old and before 3 years he executed a business split amongst his two sons as part of which listed entity came under the ambit of his elder son, M. Raghuveer who then passed away leaving behind one son who is 29 years old (as at 2020) and one daughter who is 22 years old (as at 2020). Mr. M. Kishan Rao who relinquished all his active managerial positions from almost all his founded companies (listed & unlisted) subsequent to business split amongst his two sons, was compelled to again become MD of the listed entity (as also unlisted entities which came under elder son’s ambit) post sudden demise of the elder son.

– Company is making all the right moves like capacity expansion, building infrastructure to handle more raw materials, digital marketing of its products, building digital presence in the form of company’s own online marketplace to facilitate consumers to purchase company’s products online and efficient handling and execution of orders placed, introduction of new innovative products, etc. All these initiatives have helped company recoup in just 2 fiscals, almost entire revenue lost due to shrink in target addressable market subsequent to internal business split wherein listed entity was restricted not to sell its products under ‘Bambino’ brand in major revenue generating markets of South & West India w.e.f. 1 st October 2016 .

– ‘Bambino’ brand image is still strong amongst consumers and as an undivided group, the brand still is said to enjoy more than 50 % Indian Vermicelli marketshare and is amongst one of the South East Asia’s largest Suzi-based Vermicelli producers.

– Increasing financial support by the promoters post business split in the form of interest-free unsecured loans wherein 40 % of total debt on books of the company is provided by promoters . This is in addition to high 75 % equity holdings of the promoters in the company.

– Company’s Debt-to-Equity is approaching historically lowest and PAT margins are approaching historically highest with improving revenue trajectory which deserves attention.

EBITDA to Operating Cash Flow conversion has been healthy at 20 years’ average 79.74 % which signifies that if business is managed properly it can turn out to be a great wealth creator.

– Company is trading at relatively reasonable to cheap valuation which is a rarity amongst its peer group.

However, as an investor who is looking at analysing this company, there are also some questions that come to mind ; after finding answers of which we can weigh positives and negatives judiciously ; such questions are :

Revenue growth, although linear but is sluggish ; 20 years’ CAGR (FY01-FY20) is just 5.5 % and if we take into consideration internal business restructuring which took place in FY17 then too going back 20 years from that period its just 6.2 % (FY96-FY16).

Relatively high debt and interest payment eating up entire cash flow . Operating Cash flow (OCF) generation, although healthy at 20 years’ average 79.74 % of EBITDA, high interest cost eats up almost entire cash flow generated with 20 years’ average interest cost as % of OCF at 103.22 % . 20 Years’ average External Debt-to-equity is at 2.05x wherein we have not considered interest-free loans of promoters. Including such promoters support, 20 years’ average total debt-to-equity comes at 2.26x. Any smartly managed company would have not wasted Cash generated on such high-cost debt over these many years

– Although the matter is quite old, but promoters involvement in Spectrum Power Generation Ltd. controversy is also another point we need to pay heed to.




Having enumerated positives and negatives above, it is time to look at actual facts and numbers :

Succession :

Let’s first have a brief look at Succession issue that we talked about before. Refer following :

Mr. M. Kishan Rao executed a business split amongst his 2 sons w.e.f. 1 st October 2016 under which listed entity Bambino Agro Industries Ltd and unlisted associate company Ghanta Foods Ltd came under the ambit of elder son Mr. M. Raghuveer. Mr. M. Raghuveer passed away on 25th June 2017 leaving behind his wife, one son who is 29 years old as at 2020 and one daughter who is 22 years old as at 2020. Due to sudden demise of his son, Mr. M. Kishan Rao again resumed the responsibility of Chairman & MD of listed entity (as well as associate Ghanta Foods). Only the young daughter M. Shirisha is currently on board of listed entity from Mr. M. Raghuveer family.

Considering the age of Mr. M. Kishan Rao, having completed 84 years on 10 th February 2020 and approaching completion of 85th year in 3 months from now on, it is but obvious that either the company will now be actively managed by his young grand daughter M. Shirisha who has just completed 22 years of age in October 2020 or there will be a sell-off of promoter holding in favour of a strategic investor who can run the company from now on. Mr. M Raghuveer’s son, who is 29 years old, doesn’t seem to be interested in the business as otherwise he would have taken some active managerial position or directorship in the listed or unlisted entity post demise of his father.



Listed Entity Business Scope post Business Restructuring dated 1st October 2016 :

Kindly refer following :

As said before, Mr. M. Kishan Rao executed a business split amongst his two sons under which listed entity came under the ambit of his elder son Mr. M. Raghuveer. As per the terms of the said business split/restructuring, w.e.f. 1 st October 2016, listed entity was restricted to sell products under ‘Bambino’ brand name in only North, East, Central & Northeast regions of India whereas the rights to sell products under ‘Bambino’ brand in South & West India went to the younger son Mr. M. Subramanyam’s entity Bambino Pasta Food Industries Pvt. Ltd. Alongwith the said rights, there was also transfer of 2 manufacturing plants from listed entity to Mr. M. Subramanyam controlled entities .




Revenue trajectory of listed entity over last 2 decades :

Kindly refer following :

Here, in order to enable us to compare in a proper way, while analysing revenue trend over last 19 years, we have considered each fiscal-ending to be 31st March only by extracting data from quarterly results of each respective fiscal where year ending in ARs was other like September or June.

– Company has recovered in just 2 fiscals, entire revenue lost post business restructuring in FY17.

– Company seems to be in the right direction towards the goal to achieve healthy revenue growth over coming fiscals which is evident from the recent steps taken by the management like :

replacing current machineries with more advanced ones (in FY21) which can enable higher output (~20 %) ,

expanding capacities (~50 %) under associate Ghanta Foods whose products are sold under ‘Bambino’ brand by listed entity,

building two silos (in FY21) to handle increased RM,

starting its own emarketplace (https://shop.bambinoagro.com/) w.e.f. June2020 during the lockdown phase so that consumers can directly buy online and get their products home-delivered,

efficient handling of orders placed at its eportal wherein despatch time is just 24-48 hours and products are well packaged and delivered by reputed courier,

increasing digital presence like on facebook, instagram, twitter, etc.

introduction of many new products like Ready Mixes, Spices, Namkeens, Sweets, etc. in addition to its stronghold Vermicelli & Pasta products.

It is heartening to note that even after business restructuring (shrinkage in total addressable market, transfer of manufacturing plants) as well as a big setback in the form of sudden demise of its leader within just 1 year of business restructuring, company has remained active on all fronts (infact more than before) and has not gone in stealth mode which is normally the case with any entity in similar situation.




Quarterly Revenue Trend over last 2 Decades :

Kindly refer the following :

Q2 is always strongest relative to other quarters. Q2FY21 has seen highest quarterly revenue being posted by the company .




Profitability Analysis :

Kindly refer the following where Gross, EBITDA & PAT margin trend over last 19 years is depicted :



RoE & RoCE trend over last 2 Decades :

Kindly refer the following :

Company’s RoE, from negative till FY04, has exhibited a continuous improvement since FY11 and is currently standing at a reasonable 13.68 % as at FY20 .




Cash Flow Analysis over last 2 Decades :

Kindly refer the following :

EBITDA to OCF conversion is reasonably healthy at 20 years’ average 79.74 % and 10 Years’ average 80.47 % which simply means business has been able to generate very good cash flows which, if used judiciously, can create a good amount of wealth for investors. However, for that to happen, management has to learn to balance equity and debt. For example, lets analyse the period post the company reaching One Time Settlement (OTS) with its lenders in FY08 to come out of financial mess resulting out of high debt (D/E FY07 = 3.66 with absolute debt of INR 66 cr. on revenue of 130 cr.) :

– company has been operating at tiny equity capital of just 8 cr. over last 13 years (FY08-FY20) with promoter holding at 75 %.

– This is despite Revenues and EBITDA growing almost 100 % over the same period and the brand of company getting relatively stronger with introduction of multiple new products over the same period.

– Absolute Debt on Books has increased from 52 cr. as at FY08 to 75 cr. as at FY20. However, external debt , that is, debt other than from promoters has remained same with FY08 External debt being at INR 43 cr. and FY19 External Debt at INR 45 cr… Promoters’ financial support extended to the company in the form of interest-free unsecured loans has increased from INR 9 cr. in FY08 to INR 30 cr. as at FY19 .

Absolute Operating Cash Flow generated over the said period stands at healthy INR 166.24 cr. . For a business with a scale of around INR 250 cr. p.a., to turn out OCF to the tune of INR 166 cr. over a 13 year period (FY08-FY20) is commendable and if this cash flow is managed judiciously then it could help the business grow well without much external support.

– Now, let’s look at the other side of the coin — the interest cost part — over the same 13 year period (FY08-FY20), company has used INR 109.47 cr. of OCF to serve its debt (interest payment). In other words, 66 % of OCF is used to serve external debt .

Use of OCF for CAPEX over FY08-FY20 is just INR 67.42 cr., or, in other words, 40 % of OCF is used for CAPEX which is meant for actual business whereas 66 % of OCF is used to serve external debt .

– An efficient management would have put serious thought about this and either replaced the existing high cost debt with low-cost one or would have raised equity to retire debt and make business self-sustainable.




Debt-to-Equity (D/E) Trend over last 2 decades :

Kindly refer the following :

Here, ‘Total Debt’ refers to total debt on books of the company which includes financial support extended by the promoters in the form of interest-free Unsecured Loans. ‘External Debt’ refers to ‘Total Debt’ minus promoters’ interest-free financial support.

We have here looked at D/E in two parts because :

– to assess real leverage position of the company, we need to look at External Debt closely,

post business split/restructuring, promoters have extended significant financial support to the company which can’t be ignored as in addition to this financial support, they also have 75 % equity holding in the company.

– As we can seen from the above, before company reached OTS with its lenders (FY08), company’s leverage position had deteriorated significantly with Total D/E touching 3.66x & External D/E touching 3.44x.

– Post OTS, there was increased financial support by the promoters in the form of interest-free Unsecured Loans which increased significantly post business split/restructuring which is evident from wide gap between Total D/E and External D/E .

For the first time ever in past 20 years, External D/E has fallen below 1 (0.83) .




Valuation Commanded by the company on the Bourses :

Kindly refer the following :

EV/Sales multiple around 1x and P/E multiple around 20x is a rarity in company’s peer segment, especially when :

– brand is strong in consumer’s mind,

– company is innovative in both, introducing variety products and efficiently reaching to consumers,

– D/E is at its historical bottom near to 1x,

– Average OCF each year is near 70 % of EBITDA,

– CAPEX incurred in any one fiscal is at its highest.

However, as is rightfully said, markets are always right and therefore there might be some genuine reason(s) for such low valuation commanded by the company ; some reasons are already cited in the beginning like :

– sluggish revenue growth,

– relatively high debt and high interest payment,

– key founder involvement in controversy surrounding Spectrum Power Generation Ltd.,

in addition to these :

– ‘Bambino’ brand being registered under ‘M. K. Rao Family Trust’ and not under listed company,

– high Related Party Transactions,

– lack of many minority shareholder friendly actions by the management,

– dismal Investor communication.

Despite all these reasons, as investor we need to keep monitoring closely each and every development with regards to this company because :

Company is at the cusp of management change ; either it could be internal with it getting passed to younger generation or it could be external with company being acquired by a strategic investor ;

reasonable growth visibility with historically highest CAPEX being incurred by the listed and unlisted entity (under same management) ;

– proactive moves on-ground in the form of increasing digital presence with company’s own shopping portal being started from June2020, increasing presence of its products in organised modern retail formats, increased digital marketing, introduction of multiple SKUs, etc.;

history of high EBITDA-to-OCF conversion with average standing at 70 % + ;

historically lowest D/E and therefore highest PAT margins ; and,

– above all, in case of faltering, promoters will be ultimate loosers with them holding 75 % equity holding in the company in addition to INR 30 cr interest-free loans extended by them to listed entity.

Discl.- Invested

Note :-

This is not a Buy/Sell recommendation of any kind but is only representation of facts and figures to take it as a direction for further industry analysis. Hence, it should not be taken otherwise and should only be used for deep study of the segment and peer group. This is part of a discussion and is only aimed at stating statistical facts & figures for further discussion.






pdf of the writeup attached for members’ reference :
Bambino_Statistical_Study.pdf (4.9 MB)

9 Likes

These one-liner RED FLAGS are REAL.
The above post (quoted from) cleverly underplays (just one liners, one is tempted to note perhaps to meet VP Forum guidelines, so the thread doesn’t get closed/banned) real troublesome issues while hyping up all probabilistic scenarios.

The tell-tale signs are too strong for any serious investor to get interested. They know what to ignore. But Lay Investors/Newbies, beware - this is clearly an AVOID business. Do NOT get caught up in hyped stories. Demand equal space to be devoted to cross-examination of the real negatives by anyone dismissing these big red flags cleverly through one-liner mentions, but instead hyping up/devoting lot of space to could-be (mostly hope) positives. This is part of a pattern. Learn to recognise these patterns, and you will be safe (than sorry).

25 Likes

Thanks for pointing these out. I attended Bambino AGM in Hyderabad and it was probably the worst AGM that I have ever attended. The obvious questions of related party transactions, why the company needs to outsource manufacturing to Ghanta foods, what are the margins of Ghanta foods, ownership of brand etc. were all raised in the AGM. The promoters/management refused to reply to even a single question and the stage was taken over by promoters/management cronies who shouted saying that the AGM is now over and we should stop troubling the promoters. Forget about being investor friendly/unfriendly it was hooliganism of a type that I have not seen.

26 Likes

Have been a member of this forum since last more than 10 years and have posted many (most) of my detailed works here with a genuine aim to invite diverse and contradictory views on my work ; this is the first time such wrong interpretation of my genuine intentions is made and that too with such words/sentences (quoted above) as if I am posting with some malicious intention.

Donald, whereas it is great and necessary to point out at flaws of the language of any writeup or presentation of any writeup ; to just draw the conclusion that intentionally the flaws are made or such presentation of statistics is made is a gross insult done to its author.

You, Hitesh, Ayush and others have made this forum a great forum for any investor looking to analyse or study any company/segment. You know me since last more than a decade Donald and hope you remember it was you yourself who appreciated my works elsewhere and invited me to this forum personally when this forum was just started. I have personally seen this forum evolve from nowhere into an indispensable forum for any genuine investor looking to invest in Indian equities.

Now having known me since last more than a decade, to quote such sentences is a real disappointment for me. I hope you also remember 2015 posts on MPS thread where despite my 20 % pf holding in the company I was consistently saying that there is a disconnect in what management is saying regarding organic growth and margins and actual situation ; at that time management Q&A and VP BizQuest was also done and you yourself contradicted me that you don’t find any inconsistency in management commentary ; what happened after that everyone knows and management’s commentary which builded hope for organic growth never got realised ; so were your intentions at that time wrong ?? MPS is still today quoting at less than half the price it was quoted in November’2015 ;

Here, I also want to state that you were the one who after VP Bizquest was constantly pinging the forum for possible negatives ; but the works like Management Q&A, VP BizQuest and all – were they done to hype the story ?? Not atall Donald – these are part of works we all do and post them to find flaws in our works ; although your and mine style could be different but is it proper to disrespect each other for the style of posting and that too after hastily going through 17 big pages of work in just 3 hours and drawing some conclusions and posting such harsh remarks ; whereas you are justified in suggesting some edit or modification of the work but to use the words like ‘cleverly underplays’, ‘this is part of a pattern’, etc. is this right ??

Now coming to Bambino note, hope you have gone through the entire writeup as you have just quoted the last part of the note and not the other things which are present starting from the beginning to the middle to the end of the note ;

In first page itself, writeup forms 70 % of the page and of that 70 %, 50 % is devoted to providing information (regarding succession, business split, promoters’ unsecured loans, CFO/EBITDA average, etc.) 20 % is devoted to so called perceived ‘positives’ (I will refrain from mentioning here) and 30 % is devoted to negatives or ‘Red Flags’ like sluggish growth over a 20 years period, high debt and interest payment (wherein we have contradicted positive mentioned by clearly stating its not a smartly managed company ; second contradiction made to mentioned positive is stating the fact that entire OCF is eaten up by interest payment), and promoters’ involvement in Spectrum Power controversy.

In the first page itself its not only one liner ‘Red Flags’ written but we have mentioned positives, given factual information which can be derived from credit rating reports, annual reports and at the same time contradicted mentioned positives as well as mentioned negatives.

Going into the second page, its the succession chart which is given to enable the reader who is first time looking at the company to have quick overview of the succession issue present here. Here one mistake I could see is it should be written that ‘young generation or strategic investor’ is only a possibility and might not come true.

Then we go to third page where again only information with regards to nature of business split/restructuring is mentioned and information is given as to after split what is left with the listed entity.

In the 4th page, 19 years revenue chart is given which depicts a sluggish growth over 19 years’ period ; (hope its not considered a hype);

In the 5th page, publicly available information which normally an investor ignores like that from Credit Rating Reports, Annual Reports of Associates, digital media, etc. are given. Now, in 1HFY21 Cash flow statement, one can find CAPEX item worth INR 23.53 cr., so is it considered hype to give information about where this CAPEX is made – that info is given from credit rating reports + from AR of associate Ghanta Foods (with which company has product purchase arrangement) info regarding its CAPEX is given + fact is mentioned that company has started online portal from June2020 — all these factual info are considered hype ??

In the 6th Page, Quarterly revenue trend chart over a 12 year period is given to understand volatility in quarterly numbersnow to painstakingly extract data from quarterly results starting from FY08 to FY20 – 52 quarterly results and provide it for info is considered a hype ??

On 7th page, 19 Years’ trend with regards to Gross Margin, EBITDA Margin & PAT margin reported by the company is given – is this also a hype ??

On 8th Page, information regarding 20 Years’ RoE & RoCE achieved by the company is given – here would like to mention that in debt calculation part, we have considered ‘current maturities of long term debt’ too which actually deflates RoCE and inflates D/E v/s reported by other portals like moneycontrol, screener, etc. – So, such overstating of negative is also considered a hype ??

On 9th Page, 20 years’ CFO/EBITDA chart is mentioned – its the information derived from ARs by extracting EBITDA and pitching it against CFO – now, is this considered factual info or a hype ??

On 10th Page, both the sides of the coin are stated regarding company able to generate good cash flows but it wasting it on interest payment and not utilising it for significant CAPEX – note the last line “An efficient management would have put serious thought about this and either replaced the existing high cost debt with low-cost one or would have raised equity to retire debt and make business self-sustainable.”isn’t this the downside or so called ‘Red Flag’ mentioned ?? Is this the hype created ??

On 11th Page, Interest_Cost/CFO trend over last 20 years is stated which paints the company in very bad picture – why it is mentioned here to create hype ??

On 12th Page, Interest_Cost/EBITDA trend over last 20 years is given which again paints the company in a bad picture – …??

It is worthwhile to note here that in both these charts we could have easily ignored 1 decade and only mentioned data post FY08 or FY10 of only 10 years which could have painted a rosy picture but we did the hard work and extracted data over 20 years and provided information – was it with malicious intentions ?? If I am correct, almost all the portals including screener doesn’t provide financial data and ratios from 2000 onwards – so was our intention to create hype or provide detailed information so anyone can analyse more precisely ??

On 13th Page, Debt-to-Equity trend over 20 years is provided – as mentioned before, we have inflated debt here by including even ‘current maturities of long term debt’ in the calculation which normally data providing portals ignore – so, by inflating debt which could be perceived negative by reader, was our intention wrong of creating hype ?? Also, if we could have provided data of only 10 years, the financial mess that the company was in before FY08 would have never surfaced and reader would have never known unless he/she went into detail – so was giving 20 years data which also included 3.66x D/E was with the intention of creating hype ??

On 14th Page, information regarding historical and current debt situation is given. Now, if ‘Red Flags’ are said one liners, the last sentence which is actually information pointed out which could be perceived as positive – isn’t that also a one-liner ?? If we are ignoring negatives then what is meant by this sentence mentioned on that page : “As we can seen from the above, before company reached OTS with its lenders (FY08), company’s leverage position had deteriorated significantly with Total D/E touching 3.66x & External D/E touching 3.44x.”

On Page 15th we have provided historical valuation commanded over last 10 years – and here we have not considered any one multiple which could paint rosy picture – we have considered 4 valuation parameters – EV/Sales, EV/EBITDA, P/E and P/BV – also, here we have not considered the highest market rate achieved by the company – we have considered almost lowest highest rate achieved by the company on the bourses and almost reasonable lowest rate.

On last page 16th, in which it is stated that we have only mentioned ‘Red Flags’ as one-liners – aren’t positives also mentioned in the form of one-liners ?? to mention precise figure – there are 11 positive one-liners and 7 negative one-liners – and all the statements are in one-liners only – its not that positives are detailed and negatives are one-liners –

Lastly, Donald, you are in this field since last so many years and you very well know it entails a lot of hard work to extract data, analyse them and present it in a proper digestable form – I have personally gone through all listed Bambino ARs starting from FY98 onwards till FY19 – unlisted Ghanta Foods, Bambino Pasta, Seshsayi ARs from FY09 onwards till FY19 as also available ARs of all other unlisted companies of the group like Bambino Finance, Bambino Milk, Diptanshu Food, Ghanta Infra, Hyderabad Nursing Home, KRS Finance, Nature Valley Nutraceuticals, Revathi Tobacco, Richmmount Ventures and Sugandhabai Holdings. Have studied credit rating reports from 2011 to 2020 of listed Bambino, 2015 to 2019 of Ghanta Foods, 2015 to 2020 of Bambino Pasta and 2014 to 2020 of Seshsayi Foods (have all these mentioned reports in my workstation ; if you want I can mail them immediately);

I have habit of personally extracting data from ARs and not rely on data providers like moneycontrol and others – in MPS also you must remember that I had gone through multiple peers ARs and extracted and posted data ; same thing I have done for all my works;

Pardon me, If you can’t appreciate hard work atleast don’t insult it with the words you have stated ; I want to state on record that my this writeup or any writeup whatsoever is not intended to create hype or avoid negatives or overstate positives – they are not intended to be part of any pattern or anything – if they give any such impression then it is clearly unintentional and not ‘cleverly’ planned as is said.

Before my investment into any company, I have habit of doing a detailed study and extracting lots of data – these data which I collect and analyse, I post it with an intention that my flaws can get pointed by someone unbiased as also others can benefit and study on their own.

In the current writeup, I don’t know whether you have observed or not – but majority is charts, figures and factual data only and majority of explanations, information and negatives are one-liners only. You just go through entire 16 pages writeup and tell me where I have given paras – all things are in one-liner from only as the intention is to not judge but to provide factual information of last 20 years and current situation.

This company I have been looking at passively since last 8 years and it is only now when CAPEX and all were done and succession issue was present that I collected detailed datas and posted them ; AGM feedbacks which are mentioned that were given to me also but at the same time brand credibility in the minds of consumers as well as uncrooked books feedback was also given to me at the same time.

To conclude, if you and other members still feel that my this writeup is injurious to any of the investors then I would rather withdraw this writeup altogether. We are here to let investor see both the sides of a coin and do some hardwork by themselves and not to spoon-feed them.

I have great respect for you Donald and if any of my words here have hurt you in any remote way then I apologise for that.

Rgds.

15 Likes

Alright Mahesh, we agree you (your team) has done extensive research work on Bambino. So do everyone a favour to establish your credentials firmly, once and for all. Let’s cut through all the semantics/clutter quickly (to save precious reader time) and let’s see you do 3 simple things

  1. First Establish your identity (put up a mugshot on your profile page and agree to meet couple of senior VP Members in Mumbai/or on a zoom call with VP seniors).
  2. Write extensively wearing the “negative” hat by expanding on all the negative one-liners
  3. Write extensively on Bambino Management history/track record

And I believe doodh ka doodh, paani ka paani, isime ho jayega - on the Bambino investment case.

PS: Establishing identity is imperative for anyone who writes prolifically at VP. A properly identifiable mugshot, and a in-person meet up to follow with senior VPers in your city of work/residence

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