When I was studying on the company, this factor even irked me. It was an incomplete disclosure by the company. Overlooked it however as I witnessed such occurrence in many companies - both good and bad.
Yes. The transfer was done at around Rs. 470 per share.
It was an incomplete disclosure by the company.
Due to this incomplete disclosure, we donât know the turnover and valuation of Best Agrochem, which merged into Sahyog. We donât know how much the new promoters paid for the amalgamation. All we have is that shares were allocated to the new promoters.
Yes. The transfer was done at around Rs. 470 per share.
Any guess why the promoters of the old company Sahyog (who still continue to be promoters) would transfer shares to the new promoters not as a part of the amalgamation but after the amalgamation? For free?
Company yesterday notified that yesterday they held an investor meeting with âGroup meeting.â No details of the participantsâyet another gem by the company. I hope the company will conduct a public concall soon.
Investor Presentation Q2 released on 01/12/2021
Investor presentation:https://www.bseindia.com/xml-data/corpfiling/AttachLive/ce3cda7a-3e49-4ca2-a26a-99f1c8a2dff3.pdf
Thoughts on results and future outlook? @harsh.beria93 would love to hear your thoughts.
Look at the cash flow statement.
@sahil_vi Would love if someone can look at their balance sheet and point out if their are any red flags. Company management commentary is bullish and expecting 3x revenue in next 4-5 years.
p.s- Would love if someone can share the best resource to learn to look for red flags in a balance sheet.
I am waiting for their Annual Report for further concreting my thesis on the company. Yes, the management appears bullish. The catch here is that the management has till now always delivered what it has promised.
There are not many resources that I have come across but google it and follow the various links it gives. With those links you can find a number of aspects that act as red flags and gradually with experience and practice ,you will be great to go.
Some red flags are:
I hope I could help you in your query. Its all subjective. Numbers never lie and its how we can make the best out of them. On the face of it the numbers can appear scary, but if there are various factors which make them comfortable , we need to engross our brains over it.
Disc: Invested and plan to stay in it for long term unless serious red flags appears.
I have found their growth to be really impressive, but have never been able to understand what they are doing. In the interview below, management explains that their key growth driver is coming up with new combination products. This is similar to domestic pharma growth in 2010-16 until government came down heavily on such molecules.
I have generally found that domestic agchem cos who launch products through in-licensing from MNCs (and not their own research), find it hard to grow at high rates beyond 1200-1300 cr. annual sales. It seems Best Agro has reached these numbers in less than 5-years. Will be interesting to follow their new molecules. They are guiding 500 cr. sales from their 3 new molecules and 2000+ cr. sales in FY23. At this rate, they will cross UPL in a couple of years!
I will suggest going through results from this page to be updated with their product launch.
Hope its of some use!
Listened to the interview. There was a wrong question asked around 5:55 that revenue increased from Rs 127 crore in March 2017 to Rs 1211 crores in March 2021. The question is wrong because the new promoters took over only in 2020.
And the answer was even more wrong. It seems the MD sahab forgot that his company was private before 2020. Pre-2020 revenue was of some other company. When you have dozen of stories, it is difficult to remember all kinds of stories, is it not?
Another point. The company says that Rs 500 crore revenue came from direct sales and Rs 700 crore came from B2B. I searched online to buy their products via Indiamart, Amazon, Flipkart, etc., but their products are not listed. The products of all other competitors like UPL, PI Industries, etc., can be found on these sites. What gives?
Too many red flags. The interview sounds very simple to me. I am not invested and my conviction to avoid grows stronger every day I hear more.
Iâd stay far away from the company too. The huge inventory in the cash flow statement is very concerning to me.
But, crop protection products are not sold online - itâs a retail market and being online really doesnât matter.
crop protection products are not sold online
It is perfectly legal to sell crop protection products online and many companies do it. An example: BigHaat.
What is unclear to me is how they sell their products. I asked earlier about âwhat is happening on the groundâ but despite so many months, nobody could answer this question. If the company conducts a concall, this would be the first question I would ask if I am there.
Itâs not about putting the products online.
If the products donât sell online much, itâs fine even if itâs not there! They have distributors in North India and their products are sold through them. Have a look at their Instagram page and youâll get an idea.
Farmers do not buy their pesticides online, they buy it from their trusted retailers. Retailers play a role of an advisor and they canât get that from buying online, lots of advice regarding farming is given by such retailers. Thatâs how the industry works, as simple as that.
There are multiple videos on youtube demonstrating their products and getting feedbacks from customer. Looks like they sell their products via captive agents who push only their products to customers.
It is surprising that no seller even by mistake listed a single product of such a large company on a single ecommerce website. People do buy similar products online, but no seller is interested in selling any Best Agrolife product online.
Youtube videos - such videos are very easy to make. Wonât cost more than a few hundred rupees. The number of such videos is around 10-20 whereas the company claims to have around 400 products.
I can point out many more questions. There is not much point putting them out here because everybody except me is defending the company while they should be defending their money. If the company dares to have a public concall (as opposed to private ones they regularly inform about), I will ask them questions.
The promoters took after 2020 in this new business model and a shift in business. However, it was not a sudden change. For instance, Mr. Vimal Kumar entered the company in 2019. Things changed gradually and knowledge transfer happens with such shifts especially considering the fact that the company had amalgamated with Best Agrochem Private Limited and inherited the agrochemical business in 2018. So, pre-revenue was not totally that of an old company but of a mixed business (Sahyog Multibase+Best Agro). One can refer to the AR 2019-20 for the same. Hence, in my opinion ,there is more to it than just some stories.
I found their products listed online. I had recently ordered it for personal use. Have attached a few links:
https://www.indiamart.com/proddetail/pymax-pymetrozine-50-wg-insecticide-24614944948.html
Red flags are real only when there is no justification. I hope to have more and more anti thesis so that we can benefit and make firm decisions on the company.
Disc: Invested
This is a perfect question and an alarming one. I remember you posting this question. However, its the case with other companies too. We cannot know about what is happening in the ground until we ourselves visit the grounds. Its difficult and hence we can only trust the financial numbers as eventually everything in the ground comes down to the financial statements. I might be lenient here , but as investors in various companies, the principle that âNumbers tell the truthâ is what I have followed.
Also, there are youtube videos here and there. They cant be trusted. Even I can make them in my farm. Agree with you Kalidasa ji.
0 voters
How do you know that? His name does not occur in the March 2020 shareholders list.
Sorry, I checked the AR but could not find any details of the contribution from Sahyog Multibase. Indeed, in an old amalgamation document I found that the revenue of Best Agrochem for the year ending 20 Nov 2018 was around Rs 55 crores. The revenue of Best Agrolife in the year ending March 2019 is as high as Rs 663 crores! How did they manage such incredible results?Best Agrochem revenue for the year ending 20 Nov 2018 was around Rs 550 crores.
Point is, I could ask so many questions in reply to your response. Even then your response was much better than the MDâs response in the above interview when asked how revenue grow from Rs 127 cr in 2017 to Rs 1200 crore. The MD never talked about the amalgamation or the company name change. Did the MD want to hide the facts about amalgamation? Remember they did censor (cut-off in the middle) the amalgamation document (we discussed this in the current thread earlier). Why did they censor that document?
Do we really want to invest in a company in which the MD cannot give proper answers?
They do have a page on Indiamart for Best Agrochem. Best Agrochem has a page on Indiamart but Best Agrolife does not. Why? The top products of Best Agrolife are not listed on this page. Why?
I could go on and on. I have limited interest in this though, particularly when everybody else seems to like the company so much.
I also follow this with all my investments but then I trust those companies. When somebody loses trust, then it becomes much tougher to regain it. And I donât trust a magician.
