Camson bio technologies - 590076

Name of Company	Camson bio technologies
BSE Code	590076
NSE Code
ICICI Code
Established	1993
My Take	So-So
Headquarters	Madhure Hobli,Doddaballapur (Bangalore)
Promoters
Story	Raised money through IPO in 1995. First product CALPHOMIL was introduced in 2002. In 2008, Ranks 131 in Deloitte technology fast asia pacific companies. It is trying to setup second production unit in Uttarakhand by FY11.
Sector	Bio-technology
Sub-sector	Agricultural bio-technology- hybrid seeds, biocides, bio-fertilizers – research, manufacturing and marketing.
Website	http://www.camsonbiotechnologies.com/
Positives	Reserves are at around half of annual revenue of the company. >15% NPM's for the last 2 years. For FY10, 80 Cr revenue can be expected. Market cap is around 154 Cr at today's price. Expected profitability also is at 12 Cr. So, we can expect the PE at <13 – wait and buy. Has been growing consistently and can expect to grow further with expansion of business
Negatives	Sometime before Dec 2009, Camson farm produce Ltd and Sanathan herbals and naturals moved their category from non-promoters to promoter – not sure why.
Peers
News
Price @ blogged	157.25 (Jun-06-10)

Aries Agro 532935

Name of Company	Aries Agro
BSE Code	532935
NSE Code
ICICI Code
Established	1969
My Take	Like
Headquarters
Promoters	Mirchandani
Story	Started manufacturing feed additives for bids and animals. Later added Chelated micronutrients. It plans to acquire a stake in middle east based water soluble fertilizer manufacturer. Taken to mobile marketing to boost sales. Also markets using vans in unserviced areas.
Sector	Fertilizers
Sub-sector	Agri chemicals (micro-nutrients)
Website	http://www.ariesagro.com/
Positives	Not in subsidized/price controlled commodity NPK fertilizers like DAP, Urea, SOP. All its products have a unique niche. It also concentrates on Chelates where the profitability is high. Manufacturing units in Hyderabad, Ahmedabad, Mumbai, Lucknow, Kolkata and Bangalore, Sharajah and UAE. Surely a better bet compared to Shiva fertilizers. Buy more at <10PE. 52% promoter holding.
Negatives	At 122, P/E is at 13 which is slightly on the higher side compared to other fertilizer companies of this size. Rasthirya chem. Is trading at 22PE and tata chemicals at 15PE.
Peers	Chambal, Coromandel, Nagarjuna, GSFC,

 

Bad monsoon

How does a bad monsoon affect a investor like you and me?

• Are you holding businesses which cater to agri business? This directly affects you. eg. Aries agro, Kaveri seeds, Monsanto, Bayer. edible oil companies like Marico or Ruchi soya, partially ITC and HUL. Bad monsoon is a negative for most of these companies.
• What about fertilizers? Fertilizers will be lesser in demand during bad monsoons and probably bought lesser in the season following as farmers may not have cash in hand. examples are Chambal, nagarjuna, GSFC, Madras fertilizers, RCF, Zuari
• Sugar companies like Balrampur, bajaj hindustan, Sakthi, Triveni engg tend to fall as sugarcane is in short supply.
• FMCG and white goods companies face pressure as demand for them comes down due to lesser money flow in rural areas.
• Auto industries, jewllery and many other industries see lesser demand from rural areas in years of bad monsoons.

More than all these concerns, the short term direction of the market, may go up or down in a bad monsoon. This really depends on the world markets and other macro-economic data. Sometimes, the markets expect the bad news from monsoons to be offset by urban areas. Though the current trend is positive, watch out for the earnings in these companies. These may perform to a lesser extent compared to ones that have better earnings visibility.

The bad monsoons may result in higher inflation as the food prices would rise. The GDP growth rate also suffers as India is very much dependent on agricultural income. So, overall this is a negative for all stocks as well.