I have been writtng to the compay through email , trying to get updates what happening so far , as there is minimum communication. Compay Managemnet are Professional and takes responsabiliy to answer when reached. Here is the email from the Sethia. This is definetely encouraging @ayushmit Sir any inputs from the email , Pl. do let.
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Thanks for sharing. What were your questions? Can you share that also?
Rice companies usually have the lowest inventory and maximum cash in Sep every year. Situation should reverse by March.
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Merchandise exports during Dec-21 were Rs. USD 37.81 Billion compared to USD 27.22 Billion in Dec-20 registering a positive growth of 38.9% and positive growth of 39.4% compared to Dec-19.
India’s overall exports(merchandise and services combined) for Dec 21 estimated at USD 57.87 Billion exhibiting positive growth of 25% and 23% over Dec 20 and Dec19 respectively.
Coffee exports continue to remain high with growth of 129% yoy for Dec month.
Rice exports grew by 34 % compared to Dec 20.(second consecutive month of significant growth)
Marine product exports growth of 31% vs Dec 20 and 16% compared to Dec19.
Iron ore exports down by -85% yoy for December.
Ceramic products and glassware exports remain negative.
Pharma exports growth of 8% compared to Dec 20 ( high single digit growth after many months)
Chemicals exports were higher by 31% compared Dec 20.
Engineering goods exports by 42% and 47% compared to Dec 20 and Dec19 respectively.
Exports for Cotton yarn, man made yarn/fabric, RMG of textiles remains strong.
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Hi,
Please don’t copy paste someone else’s post, credit the original author and then you can add your own comments to that.
Attn: @spartan
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Absolutely correct, My apologize brother. Credit goes to him. I though this news was completely realted to this. Thankyou.
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Above data is available on Ministry of commerce website and available every month. Sharing the link
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No dividend this year.Why is this company’s management so stingy?
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Solid set of results posted due to moderation in freight costs and increase in rice prices
Good set of results from Chaman lal Setia, sales increased by 62% and profits became 2.3x. Its interesting that they are trading at 7.7x PE despite such growth. I am sharing the concall notes below.
FY23Q3 concall notes
- Paddy prices have gone up by Rs. 10 this year
- Have done very well in Germany, Israel and Egypt in 9MFY23
- Have entered newer markets (Kazakhstan, Turkmenistan)
- 6-7% sales from own brand in International markets. Domestic sales is in own brand
- Niche is that they have a very large customer base. Profitability comes from smaller customers and smaller packet sizes (< 10kg) as they pay more
- Most exports are under 10kg packaging
- All exports are sold under ECGC (Export Credit Guarantee Corporation of India). Extend credit only to those customers with whom they have very long term relationship (2-3% of overall business)
- Will not acquire a company from this industry, instead looks for suppliers whose financials are getting weaker to take over their customers
- Don’t do any business in Iran
- Have large businesses in Canada and USA, are FDA certified
- Sales go up during Ramadan period
- Have been participating in a lot of exhibitions to get new business
Disclosure: Invested (position size here, no transactions in last-30 days)
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Thanks for the notes Harsh.
Did they say anything about if there were inventory gains in the q3. I guess so bcs margins are way higher, I was thinking that it could be because they has procured rice at lower prices earlier. If that is true, margin in next quarter could come down. Was this discussed in concall?
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They had very low inventory in end of September (~102 cr.). Their December inventory was 439 cr. So, they were buying more paddy and rice in Oct-Dec period. The way this industry works is most paddy buying happens around October period, when is end of harvest season. So its highly unlikely that they had benefitted from low cost inventory, because they had very little at end of last quarter.
Also, inventory has a much larger role in other cos like KRBL and Daawat as their business model is around rice ageing, Chamanlal doesn’t do much rice ageing.
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Important data about basmati rice exports from India in Apr-Dec 2022 period.
In the current fiscal, the growth has been primarily led by basmati rice. Its exports have gone up by 40.3% in value (from $2.38 billion in April-December 2021 to $3.34 billion in April-December 2022) and 16.6% in quantity (2.74 mt to 3.20 mt) terms.
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Very good video of the factory.
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Thanks for sharing this. I never knew that they have such a large setup.
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Any update post conference call ? Is outlook positive?
Another good set of results from Chamanlal, with sales growing by 15% and EPS by 68%. They talked a lot about innovation which was really nice to listen to. I was also surprised to see gross margins drop to 18% (vs 30% last year). Management said last year shipping costs were very high and they bill on CIF basis resulting in very high sales, which has come down this year due to lower shipping costs. But profitability has been maintained. Concall notes below.
FY23Q4 concall notes
R&D:
- Brown rice which cooks in 15 minutes with new packaging.
- Working on Vit-D enriched rice but is currently not commercially viable
- Working on 2-minute rice cooking and are filing patent
- Created a mechanical device with Ravi Saroj from IIT Kharagpur (AGFE dept) where the device which contains an absorbent is installed on the emission line and absorbs exhaust gas (carbon dioxide, sulphur dioxide, nitrogen dioxide) thereby reducing gas emission and reducing surrounding temperature. The carbon absorbed can then be reused as a fuel. They showed it on 12 ton boiler
- Developing an organic material as a substitute for pesticides
Others
- Out of 49% sales growth, 28% was volume
- Diabetic rice is 7-8% of exports
- Lower volume this quarter (YOY basis) was because of ban on broken rice export. In last year, company had sold large quantities of broken rice to China
- Last year when ban on broken rice exports was announced, they had very little inventory at the port and they didn’t face inventory liquidation issues
- Gross margin is much lower this quarter at 18% (vs 30% last year and 26% last quarter) because last year shipping costs were very high and they sell on CIF basis
- Participating in multiple trade fairs to increase customer base. Focus remains on small buyers
- Investment in plant and machinery in the rice industry this year is tremendous. Many rice mills are coming into this business
- Japan is not a big potential market as they prefer sticky rice
Disclosure: Invested (position size here, no transactions in last-30 days)
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