I am very grateful to the knowledge I have been acquired from this group… feel regretting joining very late
This is my first stock discussion…please forgive me for any mistakes!!
Yes, the stock I am discussing about the Basant Agro tech, which is part of Bhartia Group. As per their website (http://www.krishisanjivani.com/aboutus.aspx ) its in operations for last 100 years, and went into public in 1990.
From Comonay Website:
Basant Agro Tech (I) Ltd: , Has a multi-product portfolio which includes various grades of fertilizer, seeds and agriculture inputs. Not only have we set up manufacturing and processing plants in Kaulkhed and Kanheri (Akola), but also boast of a Research and development center at Kaulkhed recognized by Govt. of India.
They have the production facilities in Karnataka, MP and Maharstra
Following are some relevant ratios.
Market Cap- 63.69 Cr
Sales FY 2016- 316 Cr
Market cap to Sales: 0.20
Price to book value- 0.62
Consistent Dividend paying Company for last 10 year or so.
Following are the items attracting me to invest in this stock.
- Sales to Markt cap: 0.20… If I compare Basant with any of peers its undervalued by 70 to 80%. For example: Same matrix for Rallies: 3.51(FY 16- Sales: 1385 cr and M-cap: 4863- (little change ( 2 to 3%)be there as I have prepared this 1 month back), Monsanto: 6.87 times, Kaveri seeds: 4.97, Advant: 4.96, GSFC: 0.8, GNFC: 0.77, Tata Chemicals: 0.94 and Deepak Ferilizers: 0.58
- Though its Micro cap( 63.69 cr), its dividend paying company for last 10 years.
- FY 16- Operating cash flows: 32 cr for market cap of 63 cr
- No Equity Dilutions from inception ( correct me if I am wrong)
- No single share of promoters pledged
I read through annual reports for last 4 years, haven’t found any red flags( at least I was not able to find -senior should help-- there might be few which I couldn’t identify)
ROE- 5.75, sales growth 2.8% for last 3 years.
Stock not really moved any where for last 3 years.
I feel if Monson is good this time, this stock should catch up the numbers, even if it do M-Cap to sales at least 1, it should be 5x from current levels.
In this context it should be worth noting that Monsoon was below average for last 3 years, hence all Seed and Fertilizers companies are really not doing well. But we really look for triggers like: 1) Gov wanted to double farmers Income by 2020 (2) Gov Fertilizers Subsidiary reduction/deregulation or Direct benefit transfer 3) More Focus to increase the rural income, this should bode well for this company.
If the seniors or other members can share their views, I will be most great full
Disclosure : Holding small 5% of my portfolio, planning increase stake based on the conviction I get.