Provided one has bought with enough margin of safety - avg cost not exceeding 1200-1300 (not on speculative basis…or too aggressive allocation) and wanting to hold for medium to long term, I do believe this one isolated incident is ignorable…its not as if everyone is jumping the gun and joining a sale queue;)
Timing of the sale can be considered suspect, but then there are so many times individual/family liquidity or liability requirements that may prompt such a sale. Someone was telling me might even be inter-promoter transfer,etc. Haven’t dug much as I am not too bothered.
If Kaveri has indeed done 60 lac packets this year, it might have much larger significance in the broader long term story. As seen from oversupply vs demand for the current year, Kaveri capturing 15% market share will see some smaller player really badly hurt.
Established stronger hybrids with growing market share coupled with increased traction in maize and potential opportunity in rice, can see it going for a longer horizon. People entering now /increasing position need to position themselves not only for the June quarter and rush to sell to book profits, but look at the bigger picture too.
some points from casual discussion with regional head
of ****** seed company.
1). Nuziveedu is sinking ship - it dose not mean that they will finish completely , but monopoly is finished for sure.
2). kscl has surprized every one from next year it will be counted in big boys .
3.if rain continue like this for 1 more week then ajeet 155 and mayhco will defiantly suffer. these two r better when there is average rain. and will cause in less market share for next year.
4). cotton has been planted almost same % to last year in maharashtra.
Rallis India’s first qtr results press release mentions that Metahelix – its seeds division subsidiary has shown sales growth of 81% to nearly 150 cr and net profit more than doubling to 28 cr from previous year’s first quarter figure of 12 crores.
Seems like good times for all seeds companies and kaveri should also show great growth in first quarter…as indicated by team hyderabad.
[quote="Vedant, post:398, topic:608487840"]
> Hi,
>
> Here is a projection for Q-1 and full year EPS and stock price.
>
> 0.6
> Vol Growth | 160
> Net Price | 770
> Gross Sales | |
|
> Non Cottn Sales | 220
> Oth Income | 1.22
> Total Income | 779
> Tot Expenes | 622
> Non Cottn Exp | 171
> Cotton Exp | 450
> Fin Cost | 155
> PAT Margin | 20%
> Q-1 EPS | 113
> FULL YR EPS | 138
> CMP P/E | 11.2
> Tgt Price 13P/E | | 1793
> Tgt Price 15P/E | | 2068
> Tgt Price 18P/E | | 2482
>
> Assumptions:
>
> 1) After discount price is Rs 770, though reports from team hyderabad points to Rs 790-800.
>
> 2) 40% growth in Q-1 from the non-cotton segment. Team hyderabad report points to much higher growth.
>
> 3) Rest of the year sales growth will be 25%. Maze story should give higher growth than this in the next 3 quarters too, especially Q-3.
>
> 4) 60 lac packets will be sold in Q-1. I suspect it will be around 65 lac packets I Have huge exposure in this stock and views will be
[/quote]
Hi,
In the below projections posted earlier, pls note that the entire 60 lac packets sales based on the ground level data we collected may not reflect in Q-1 itself. The EPS in that case might be lower for Q-1 (More than Rs 100) and higher for Q-2. The full EPS projections remains same.
Based on latest info the non-cotton sales could be higher than 220 Cr mentioned below in which case we will have a higher EPS as the margins are higher there.
R venumanohar rao sold 12000 shares out of his total holding of 5.23 lac shares… I dont think thats too significant… if u compare his total no of shares and no of shares sold…
Was it the same guy who sold around 40000 shares earlier?
Certainly not a good sign right just before the company’s major and most important results announcement. Not quite really sure why they are selling now as the whole market expects the results to be blockbuster… I believe we should be a bit cautious and new investors should not enter before the results…
In last 10 days, these two gentlemen together have sold 1 lakh shares of the company worth 16 crore. That in itself has stopped the forward march of Kaveri share. Now, the question is 2 fold.
a. Is the money needed by them in some personal capacity? If that is the case, then price will start moving upwards after a temporary hiccup.
b. Do they sense that this is the highest that they can get in near future and utilize the moment.
Page promoters kept on selling their shares in smaller quantities through out its bull run and Page became a 8-9 bagger. Will it be repeated in Kaveri or are we going to be financing promoters personal needs?
With most of the evidence, i will give benefit of doubt to promoters. Another point of view is that selling post results can put a cap on price due to absence of any major good news for a year. So they are taking out some money for personal needs. I think they have been slowly selling for a while now.
There is certainly a pattern here. One can check for similar selling last year by promoter family with similar timings. One should go back & check.
On the face of it, looks like a “bit of trading” in ones shares. and is certainly not a good thing, as we are seeing repeating patterns. My guess is that the “reasoning” may be - selling before results and before the frenzy has really caught up - will not be as questionable, as say- selling after the results & the frenzy …as that may crash normal price discovery.
I haven’t looked at the data/history, but doesn’t look like one-off sales, or that this is “slowly selling”. This is questionable practice, and given the current market cap of the company the spoils are pretty minuscule, so why indulge in it.
This hampers normal price discovery for a stock. It’s not done (by Promoter family). Anyone familiar with the Page story can educate more on this sharp practice?
PS: Given our groundwork and feedback from all corners of market - this is not an act of insider selling:), so rest easy on that front. But questions need to be asked!
regarding Page inds, as far as I can recall the promoter are going to reduce their stake to 51% (probably in line with Jockey license terms… not too sure about this one but have read it somewhere…)
Regarding kaveri, its a case of whether to look at the broader picture or to look at small small things… take your pick.
Off topic but request you to give your opinion on Amara Raja promoters in the Amara Raja thread. A post today talks about what those promoters are up to.
Discl: 