Added Titan .
Krishna,
If possible , please share your current strategy about Unichem?
still holding it and feel they should be doing good in FY14.
Asian Paints Ltd has acquired a 51% stake in the Sleek Group,whichis engaged in the business of manufacturing, selling and distributing kitchens, kitchen components,cabinets,appliances etc.Competition to TTK Prestige in kitchen business.
http://www.bseindia.com/xml-data/corpfiling/AttachLive/Asian_Paints_Ltd_190313.pdf
Does Sleek sell cookers, utensils, induction stoves etc. I have seen their kitchens in @Home. Never saw these small items.
Reshuffled the portfolio to add kaveri seeds and symphony
Group,whichis Link: http://www.bseindia.com/xml-data/corpfiling/AttachLive/Asian_Paints_Ltd_190313.pdf
Hi Hemant,
Sleek isselling and distributing kitchen components including wire baskets, cabinets, appliances, accessories with a pan India presence. I donāt think it will eat prestigeās major market which is the cookers, cookware and induction cooktops.
I believe sleek is more in to modular kitchen space.
Hi Krishna,
Thanks,but i was only referring to TTK smart kitchen business. businesshttp://www.prestigesmartkitchen.com/home-kitchen-hoods-&-hobs
Hi Krishna,
Kaveri seems to have not so clear visibility of future growth. So what exactly was in your mind when you added it to your portfolio.
Regards,
-Subash
Prestigeās core is cooker/cookware/appliances. They have very small presence in modular kitchen business and they were not so aggressive to expand this. So no issue as of now with sleekās .
Hi subash,
This year it is going to be cut throat competition because there are inventory piled up from unsold packets. This is where kaveri can outperform the smaller players because of the quality seeds like jadoo and jackpot and expertise management. I believe one advantage is the seed can be used for 3 years to carry forward without affecting the quality(worst case scenario). They are confident of capturing the market share even if cotton acreage decreases as they did last year. Also kaveri is the market leader in maze with 13% revenue. So if cotton acreage goes down, chances of shifting to maze, bajra etc is high. Also i am bullish on the concept of hybrid rice. As per concall, riceacreageunder hybrids to increase from 2.5 mn hectares to 7.5 mn in 5 years. I believe they should do well for the next 2 years.
I thought this is the time to nibble gradually even when there is no great concrete visibility for the next 4-5 years because of dynamic macro environment.
I am just following the strategy which i followed for hawkins by initiating positions when there were lot of****uncertainty @1400-1600.
If this will succeed or not i can say only in hindsight.
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krishna,
On symphony while the market is big, it has two risks attached to it.
First is the state of summer ā how hot is it
And second is the cropping up of intense competition ā When big boys like bajaj, and havells with large distribution networks enter the fray, I think symphony could suffer. Technology wise an air cooler is not a complicated thing to make and quality wise, also I think players like bajaj and havells are more than likely to match symphony, so over the years I think this could be a market which can be compared to the current state of affairs in the AC markets ā too much competition.
Agree about kaveri-- uncertainty is an opportunistic investorās best friend.
Would appreciate your views on the above concerns.
regards
hitesh.
hitesh bhai,
The reason i like symphony is because of 2 reasons:
1). As you said, it is a market with very less moat. There are lot of unorganized players here and also organized players are becoming interested. Symphony has a market share of 45-50% and to achieve this in the last 10 years is a big milestone with good pricing power. Symphony entered the highly unorganised homeair cooler business in India to make Symphony a national brand and a generic name for homeair coolers.I have seen very less management cadre talking of topline growth without compromising the NP margins and ROE. Symphony is one of them. Havells and bajaj are not a big threat for the next 2-3 years and the competition should help to expand the huge untapped rural market. Maharaja had once entered but now they have exited and orient/havells have begun and not made any great volumes as per the concall transcripts.
2). The industrial cooling which is a virgin market and the first organized company to enter. Management is expecting 100 crores of revenue alone from this in the next few years.Once this clicks and if they can repeat the same thing they achieved in residential coolers, it can create great wealth from here too.
http://www.moneycontrol.com/stocks/stock_market/corp_notices.php?autono=595609
Besides they are aggressively trying expanding in overseas,especially in Russia, Australia, Latin american countries etc. This should reduce the too muchdependenceon Indian summer.
Though my allocation is not huge (<10%) , I feel if all goes well, it is a nice stock to be held for the next 2-3 years.
Hi Hitesh,
This query is only out of curiosity are u being opportunistic on Kaveri??
Regards
gs ramakrishna
kaveri is a tricky call to make currently.
I think ideal thing would be to buy stock at prices which capture in a lot of possible negatives.
Although management does seem to be talking about 20-25% growth the high level of inventory with all the players does indicate cut throat competition.
regards
hitesh.
Hi krishna,
What are your views on Mayur post results. What do you think about moving this allocation to Kaveri and Unichem?
Hi Rohit,
If you have more than 20% in mayur, then move some of that to kaveri. Unichem has been the only stock in my portfolio which has not moved for the last 1 year for me, the rest being outstanding.
I am still bullish on Mayur and will hold.
Krishna,
What can be the reason for marketās apathy towards Unichem? Isit be due to Subsidery issue ?
Do uou think it is pure ignorance and be considered as an opportunity to add more?
nani057,
honestly i do not have an answer for this. may be the market is still not convinced about their topline/bottomline growth in the coming years or the stock could be in a consolidation phase before the big up move.
I concur on your mayur view .
With focus on US & Europe OEMās / replacement markets / increasing container shipment on month to month basis in general exports where margins are good / management trying to develop New export marketin several countries ( as understand in concall Chairman returned concall morning from one such visit ) / Demand not being issue / working 28 /29days in a month / planning construction activity for 6th line and other similar positive vibes during concall.
hope 2014 to be good and '15 a Great for mayur.