Kaveri Seed Company Ltd.| Q3FY15 Result Update | Upgraded to BUY with increase in TP to Rs.908 from Rs.795 :: IndiaNivesh

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

Kaveri Seed Company Ltd.|Q2FY15 Result Update | We maintain HOLD with previous target price of Rs.795 on stock ::IndiaNivesh

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

Kaveri Seed Company - Cultivating growth; visit note; Edelweiss

Kaveri Seed Company (KSCL IN, INR 1,049, Not Rated)

We recently met the Kaveri Seeds (Kaveri) management to get a sense on the industry as well as the company’s business. Despite revenue and PAT CAGR (FY07-12) of >40%, management believes the company will continue to grow at 20% CAGR in cotton crop over next couple of years (volume term); other crops are likely to register even higher growth. The under-penetrated rice market is the next big opportunity for the industry as well as Kaveri.

Technicals: NIIT tech, Kaveri Seed, TTK Healthcare, Federal Bank, Navneet Publications, EID Parry, SRF, :Business Line

Please provide technical guidance on SRF and EID Parry both of which are currently trading at 52-week lows.

Ajit

SRF (Rs 199.7): You are right in stating that SRF is trading at a 52-week low. The stock is in a medium-term down-trend since the peak of Rs 444 recorded in November 2010. But it is halting at the key long-term support at Rs 200. This level occurs at 61.8 per cent retracement of the stock’s up-move from February 2009 low.

We can give the stock leeway up to Rs 180. That is long-term investors can hold the stock as long as it trades above Rs 180. But decline below this level will drag the stock to Rs 98 or even further to Rs 62.

Medium-term resistances for the stock would be at Rs 290, Rs 320 and Rs 350. The stock needs to record a strong close above Rs 350 to pave the way for a rally to Rs 444.

Buy Kaveri Seed Company- “sowing the seeds of growth”:: LKP

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� �


Given the structural demographic issues of rising population and surging food demand which is exerting pressure to raise crop yields on the back of shrinking farmland, we believe that the structural shift towards hybrid seeds is now a reality. Seeds being sequentially amongst the initial inputs used by farmers are now witnessing a conscious shift towards hybrids after tasting success with GM cotton seeds and success of programs like NREGA. Cotton is the best example of how hybrids have not only improved productivity and incomes of farmers but has also led to a decline in consumption of pesticides. In line with this trend we expect Kaveri Seed Co. Ltd. (KSCL) to improve its volumes of cotton seeds by 50% to more than 1.8mn packets during FY’12 which on the back of a 25% rise in prices over last fiscal should ensure that KSCL would derive half its total revenues in FY’12 from cotton seeds in which it has half a dozen hybrids. We believe hybrid seeds would continue to remain the most profitable link in the agricultural value chain which should spur profits of pure hybrid seed companies like KSCL with a predominantly domestic focus and we expect 24% EBIDTA margins to be easily sustainable for KSCL.
Our pick to play the agricultural productivity theme in India
FY’12 & FY’13 should witness robust free cash flows since most of the capital expenditure is now behind KSCL. With 9 seed processing plants having cob drying and cold storage facilities along with transgenic containment units, gene bank & a Green House, we believe that KSCL which owns 600acres of farm land within the listed entity has completed most of its capital expenditure. With the investment phase behind it, KSCL in our view is now poised for robust free cash generation this fiscal and during FY’13 which bears testimony to the road map laid out by the management in building a sustainable growth oriented business model for KSCL with a presence across crops. Poised for a 35% CAGR growth in pre tax profits over FY-11-13 on the back of a 25% CAGR growth in revenues over the same period, we believe KSCL trading at 8.5xFY’13E earnings is the best available stock to play the agricultural productivity theme in India.
Valuation
KSCL over the past few years has clearly demonstrated its ability to grow in a highly competitive business environment across its product categories. We expect KSCL to continue the growth momentum and recommend a BUY on the stock trading at 11xFY’12E and 8.5xFY’13E earnings.

Four farm stocks to own :: Business Line

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

You're convinced that your portfolio can reap gains from companies manufacturing agricultural inputs, but which ones should you own? We sifted through the listed for companies with rock solid fundamentals- a diversified profile, limited debt, a return on net worth of about 20 per cent and operating profit margins of 15 per cent plus.

Coromandel International

With a portfolio spanning complex and phosphatic fertilisers, crop protection chemicals, micronutrients and recently rural retail, Coromandel is a preferred exposure for institutional investors seeking the agro theme. The stock has been through a rough patch recently owing to a drop in March quarter profits, which were impacted by lower trading volumes, high input costs and a plant shutdown. However, the business remains a good medium-term bet. The shift to a nutrient-based subsidy system has seen Coromandel improve its margins and upgrade its product mix. The recent upward revisions in subsidy for decontrolled fertilisers signals the shift to a more friendly policy stance. The company's backward integration into feedstock has provided a hedge against volatile prices. The stock (Rs 318) offers scope for gains at a price-earnings multiple of 13 times trailing 12-month earnings.