Kaveri Seed Company Ltd

Kaveri Seed Company Ltd

 Other Agricultural Products

Market Cap.: ₹ 3,128.54 Cr.

Current Price: ₹ 453.05

Book Value: ₹ 156.07

Stock P/E: 18.98

Dividend Yield: 0.55%

Face Value: ₹ 2.00

Company is virtually debt free.

Company has a good return on equity (ROE) track record: 3 Years ROE 36.29%

Net profit 160

Even after this much correction the company is still not cheap.

Replication of seed by smaller organizations.

Replicate seed

copy within 2 years

High entry barriers

less knowledge

not so serious farmers? Can re-use last years bought seed crops one or two times? Who care for next crop when right now I can manage without spending a penny.

Rainfall dependency

Can buy if price further goes down?

too much relation with monsoon..

But has potential for sure

expanding away from cotton into Paddy etc which can be good for long term. So management is thinking in long term. Investing to keep up the business.

gov regulation on price will always be there for India.

patent issue

successive bad monsoon

hybrid paddy millet corn

inventory pile up

If no better option kaveri can be good

all bad things happened in one go

Good shareholder letter

Good management

growth was too steep in last years may be not now or may have reached the peak and only downside from there

still a costly stock so why opt?

I guess I should sell if price is right

No pricing power

may have brand but what is use of brand if no pricing power

external dependency for technology

Monsanto

Donald has also left the company ..

 

Final Verdict: There are many other options

Disclaimer
I am very new to value investing and this is me taking random notes just for myself. Please don’t base any of your decision on these write-ups. That will be foolish.

 

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