does this provide a good entry point for new investors like me who have no exposure to the stock…
I had a query sorry if it may silly or stupid, pardon me for it. I read about the huge germaplasm bank of the company…so basically this the company has developed for hybrids yet it pays monsanto royalty of few Rs per bag…so wondering how this works out practically…since on one hand there is huge germaplasm bank and on other hand it is paying royalty…
in the stock story Monsanto is mentioned as a competitor yet here it seems like a strategic partnership since royalty is paid…
Regarding entry into kaveri, I think it would be wise to allow the stock to consolidate at a level once this correction gets over and then contemplate an entry.
Ahh, the golden truth :). It took me more than a year to realize that it pays substantially more if you clone valuepickr seniors like Hitesh/Hemant/Donald/Ayush/Safir. I call it copy-paste investing.
Count me too in that cloner / copy-paster list - Astral, Canfin, Wimplast, Mayur etc. Jai Ho Mohnish Pabrai !! he would proudly say that all of have become “dhandho” investors
if i remember correctly someone at this thread at nicely pointed the relation between inventory and the future sales of Kaveri…
So according to filing by the company a point to note is huge increase in raw materials consumption from 32 cr to 220 cr and change in inventory to 179 crores as against 17 cr only.
This indicates that the company is expecting huge surge in sales in the coming quarters and in anticipation of that production of seed has been increased manifold.
we can expect huge increase in turnover in the coming quarters and also in profitability.
I had only pointed that out in the Oct 2011 post in this thread.
But I was using the balance sheet figures. You have pointed out to something very interesting in this aspect - the increase/decrease in inventory figure mentioned in the P&L. It is 179 Cr in Q-3 this year compared to 17 Cr in Q-3 last year.
Yes, they could be building up inventory for the June quarter big bash. The balance sheet figure after Q-4 results will be a much better indicator.
Could Manish bhai provide some insight on the feedback from farmers. We know Kaveri’s growth is based on eating-up market share of others, but a severe fall in area under cultivation due to weak cotton prices can lead to margin decline.
Yes, weak cotton prices hasto some extent made the farmers moving to other crops. e.g. We have sown Guar Gum crop this season. But the %age of farmers moving away could not be that high to make a significant difference. I have not been in touch with the farmers recently. Will get some feedback from the farmers from Vadodara and Saurashtra regions and revert back.
I think its interesting to see the company increase the div to Rs 8 in the interim from total Rs 4 last year. So with a final div remaining, perhaps the pay-put ratio will improve (though agree with Hitesh that its still low).
Looking at the high PE etc and reading about the lower acreage in cotton, I had exited the stock. But we should do some work on the upcoming season…may be increase in inventory is a pointer.
