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nav_1996
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   Topic: Monsanto India - Sowing seeds of the future?
Posted: 21/Sep/2006 at 11:46pm |
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Is this going to be a steady multiplier?
Edited by basant - 26/Sep/2006 at 11:01pm
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reetesh
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Posted: 21/Sep/2006 at 2:24am |
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You can also look at JK Agri Gentec, desi version of Monsanto.
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When going gets tough, that’s when tough (people) gets going.
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nav_1996
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Posted: 22/Sep/2006 at 1:00am |
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Found this on one of message boards. So I am not going to touch it.
"The Promoters are trying to increase their holding by this way. The Company has shares which are worth Rs.600 per share on its books. Promoters want these shares at Rs.100 by these "demerger". It is just like the ALEMBIC Case shown on CNBC today, where shares worth Rs.8/10000 are being purchased at Rs.1800. In this case promoters are buying a share of JK Agri Genetics worth Rs.600 at Rs.100 !! Will they give small shareholeders such a chance !"
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basant
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Posted: 23/Sep/2006 at 3:40pm |
Monsanto India - Sowing seeds of the future
Monsanto India (CMP Rs1488) is an MNC company with solid pedigree. The company is actively engaged in the production of new variety of seeds and other chemical products used in agriculture.
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Financial Synopsis |
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CMP |
Rs 1488 |
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Market Cap |
Rs 1278.20 crores |
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Revenues Fy 06 |
Rs 330.73 crores |
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EPS Fy 06 |
Rs 66.08 |
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PE |
22.50 times |
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Book value |
Rs 378.93 |
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RoE |
20.52% |
During Fy 06 the net sales of the company at Rs.332 crores was lower by 12.4% compared to the previous year. The company attributed this fall in sales to the reduced third party distribution activity The Operating margins have expanded to 24.22% in 2006 from 21.36% in 2003 while The RoE has also jumped to 20.51% from 19.54% during the same period. Presently the company trades at a PE of 22.50 times to its FY 06 EPS and appears fairly valued. The kicker would come from the new products that the parent would launch in India.
The Seeds business has been steadily growing over the last 3- 4 years with increasing realizations and margins while the increasing number of generic products in the market has lowered the realizations and margins of the agrichemical business
Going forward the seeds business would be the growth engine of the company and Monsanto continues to make significant capital investments in this business segment. Last year the Company made investments in a Corn drying facility in Andhra Pradesh. This venture would support the increasing demand for quality seeds both in the local as well as international markets. The company hopes to get this project into production during the first half of 2007.
Recently the company has been facing stiff resistances from the local generic products. In this connection there was also a news item where the company wanted to sell out of its flagship brand “'Leader'. United Phosphorous a competitor has been launching similar products at very low prices.
Recommendation Monsanto has been a company that represents huge potential but how that potential would be realized is any one’s guess. Our political system and the loopholes in the patent regulation have restricted Monsanto in introducing its newer varieties into India. The basic problem with these MNC’s is their apathy to channel new products through the listed entities. Almost all these MNC’s have 100% subsidiaries except Glaxo which they use in selling their high margins profitable products. While the growth in agriculture business is huge and tremendous it remains to be seen as to how Monsanto captures this growth. The stock does remain a buy at the current levels. as it appears to be a steady compounder.
Source: Company feedback and media reports
Edited by basant - 23/Sep/2006 at 3:52pm
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nav_1996
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Posted: 23/Sep/2006 at 10:52pm |
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Thanks for your analysis Basant. True it is definitely not a multi-bagger. I am more looking at this from hedging but could still double in 3-4 years.
Also do you have details about Syngenta. I realize that they offer more variety of seeds but it not apparent that all products are offered by the listed entity.
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basant
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Posted: 23/Sep/2006 at 10:25am |
I think Monsanto should double in 3-4 years and then keep going that way. The opportunity is Big as we all know and with the advent of large scale Industrial farming we should see these stocks do well. ANother one that comes to mind is United Phosphorous. Their products are priced lower and they are doing very well both in the domestic market as well as in US.
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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Vivek Sukhani
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Posted: 23/Sep/2006 at 11:29am |
Actually, the quarterly results of Monsanto india for the June quarter were very impressive. So, although it may face some anti-trust moves for its GM Cotton seeds yet the demand os too strong and they are making best possible efforts to tackle spurious, fake and generic products.
Syngenta is a company which has a wider product base. Its into herbicides as well. The only thing which remains to be seen is whether the GM seeds business has the potential to decrease the pesticide consumption significantly in which case, companies llike Monsanto and Syngenta can do extremely well.
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durasmile
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Posted: 12/Oct/2006 at 6:52am |
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Yes The results were 60 rupee eps for the q, one needs to remember that Wipro chairman Mr Premji is one of the largest shareholders in the company, This quarter will show how fast monsanto is able to scale up
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