KSE Limited --- Interesting Business

Hi @nitin_verma any update on how is KSE or cattle feed business faring currently including price trend of cattle feed? Thanks

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I am invested in Godrej Agrovet. While checking SHP I noticed that Godrej group has increased stake in KSE Ltd.
Godrej Agrovet 2.83%
Godrej Industries 2.05%
Nadir Godrej 1.37%

Not sure if they are slowly trying to take stake like how they did in case of Astec life. Just sharing an observation.

D: Not invested, Just tracking.


In Q1-FY24, cattle feed segment has turned profitable. As the company doesn’t do any concalls, we could get some insights from Godrej Agrovet concall.

Few excerpts from concall:

Godrej Agrovet talking about increasing stake in KSE Ltd


Some excerpts from 2023 Annual report - 2023 - https://www.bseindia.com/xml-data/corpfiling/AttachLive/88e75776-48ce-41ee-abbd-a28393521d8f.pdf

MD interview (bit outdated - 2022)

Disc: Invested


I do not understand what they can really do (in short term) to reduce volatility in the stock price? Agri input prices do fluctuate wild time to time, also govt as competitor and controller of milk price (+ may be feed price also), will continue to swing company’ bottom line.
Developing alternate non seasonal business (Ice Cream?) and where price can be passed easily is the only way. But that will take some time and money.

Disclosure: Currently a minor investment, will increase on dip.

Good data here, thanks! Seems like a good mean reversion play, with capex decision (hope they go ahead with it) being the key long term growth trigger.

Feed : Key ingredient is Copra along with other grains , this is the key variable that determines the margins. High Coconut oil price is the indicator, if oil price is high they can earn better margins.

Ice Cream : I think they are on the right track, I have checked their google reviews, for every review there is one standard response, a dedicated social media team to monitor these channels will help

Milk + Mil Products : Zero profit , Zero margin business. I am wondering how come other players (state players like KMF/ Nandini, Milma etcc… ) making good money ?

They appear to be serious by hiring a consulting firm to look into the bueinss but unless they conduct calls it is really hard to know what is going on inside.

I have asked around people based in Kerala, they said in feeds they are number one. Very strong brand recall.

Risks :

There are government players in the feed , who get substantial discounts so they sell the feed cheap
Same with Milk

Godrej Agrovet is into all the product categories Feeds, Milk Products including Ice creams (Creamline acquisition )

Promoters + One retial share holder has in total 51% stake , very illiquid stock hard to find decent quantitity to buy.

Discl : Tracking Postion


I think Rice Bran and Maize are also major raw materials used in animal feed segment. You can refer 2023 Annaul report.

As per my knowledge, rice bran , maize are at elevated levels. They have softended a bit but stalilized at higher levels.As the monsoon is below average in south India and excess in North need to see how prices move going farward.

Also India has banned export of rice bran to control the infaltion of animal feed. This is helping manufacturers a bit. Coconut prices are inching up slowly (I feel this also will have an impact on copra in coming days).

Copra prices have it rock bottom in South India. Selling way less than the MSP price. Farmers did protest in few places of Karnataka recently against the price collapse (you can Google for more info).


AGM Proceedings.



Weak set of numbers - Q2FY24


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Decent numbers:

PAT would have look better if exceptional loss was not there due to floods in TN.

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Is there any update or insights on their initiative of evluating their current business by Grant Thornton ?

Nothing disclosed in public till now.

I got an email from the company which gave more information about this (see below).

Chairman’s Letter

I’m delighted to announce the 3rd quarter results, showcasing a growth of 4.3%. Our objective at KSE is to deliver value to investors. As previously mentioned in the annual report, M/s Grant Thornton(GT) was engaged to provide strategic recommendations by conducting a detailed market analysis and evaluation of the company’s internal strengths and weaknesses. The growth strategy proposed by GT comprises of segment level, functional level and corporate level recommendations which are poised to enhance our growth and presence in the market. These interventions are pivotal in emphasizing our progress and the steps taken to ensure sustained growth.

We are now going to examine the recommendations provided by GT for implementation. Following are the key highlights of the growth plan proposed by GT.

· Market expansion to new geographies, introduction of innovative products and diversification of product offering across Animal Feed, Ice Cream and Dairy segments.

· Strategic restructuring of the organisation structure to elevate decision-making processes with new positions comprising of a full-time professional CEO for Animal Feed & Oil Processing and a full-time professional CEO for FMCG products which include Dairy and Ice cream segments.

· Enhancement of cost accounting measures to clearly understand performance of all the four business units – Animal Feed, Oil Processing, Dairy and Ice cream

· In the Animal Feed segment, to achieve enhanced growth in the next financial year, phased market expansion and penetration in other states with emphasis on cost optimization through dynamic procurement and strategic pricing adjustments.

· In the Dairy & Ice cream segments, strategic pricing of portfolios, strategic positioning of the brand, team enhancement with specialized expertise and new products.

· Strengthening branding for “Vesta” as an FMCG brand of KSE to enhance its market presence and brand recall through strategic marketing initiatives.

· To enhance functional performance, initiatives are planned across five areas of People Excellence, Digital Transformation, Financial Excellence, robust Governance & Compliance, and Environmental Stewardship.

· As technology is poised to assume a central role, as part of digital transformation initiatives, the ERP systems would be strengthened and a tech-driven performance culture would be implemented.

· To instil a performance-driven culture, enhanced incentive pay structures would be implemented for marketing team across segments to drive the growth strategy goals.

Under the renewed vision, the suggested growth strategy is poised to fortify KSE’s position and pave the way for continued success in the evolving market landscape. These strategic initiatives signify our dedication to operational refinement, performance enhancement, and sustained growth. Looking ahead, we anticipate a steady growth in the upcoming fiscal year, further enhancing our top-line performance.

I thank you and solicit your continued support as we navigate these dynamic markets and pursue our growth aspirations. I will come back to you all again after examining the recommendations put forth by GT.

Disclosure: Invested (position size here, no transactions in last-30 days)


KSE sell Ice -creams

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