What will be the impact of the whitefly attack on cotton crops in Northern India on Bt Cotton seed companies like Kaveri Seeds? Looks like there will be some severe short term impact on the sale of Bt Cotton seeds. Not sure, if the company can turn it around over a longer time.

AND NOT TO FORGET....Warren buffet's berkshire currently holds 69 newspapers.....with over a dozen acquired in the last few years.

In warren's words.....' the economics of a typical newspaper may not be as good as they were say 2 decades back. But as far as delivery of local news is concerned( like what is happening in a particular city, what happened in a local high school match, local real estate prices etc)......newspapers still reign supreme'.
Therefore buying into newspaper companies might not be such a bad idea.....specially in India where the penetration of the internet is no where near the US.

DISC- Invested in Jagran Prakshan at Rs 134

It would help a great deal if the hypothesis (if it is pushing an agenda) is flattened with a few sharp questions from the Valuepickr veterans. I understand that they are not obligated to do this, but, would be a great help to the larger community.

Was on the management call today.

The MD said that the margin contraction is due to inventory losses booked in the quarter. Net of inventory loss, the business is running at a steady 28-29% gross margin.

He said that if inventory losses were to be ignored, Q2 would have been the same as Q1FY16. In that case the PAT would have more than doubled compared to Q2FY15.

He also said that he doesnt see losses on this account in Q3.

The story remains intact...added some more position today at 720.

Mcap when posted : 1261cr
Disclosure : 13% of portfolio. average cost of acquisition is above 800

@ayushmit, @rohitbalakrish_, @Donald,

Super efforts in first collecting and then compiling the inputs from management/business in BQ/MQ sheets. I truly believe that BQ/MQ sheets compels one to look at the businesses in more structured manner and help one identify his/her blind spots in investment thesis.I have benefited immensely and am sure if one is disciplined enough to follow it with all sincerity, the rewards are bountiful. In fact, I feel (or rather wish!) that all the new threads initiated on VP shall have this templates filled in before is is approved. That forces the initiator to do plenty of work before presenting it to the forum which can improve the quality of discussion and participation.

Coming to MPS, I think the BQ/MQ sheet very well highlights the distinctive features of the business and management and makes a strong case. So, I will focus on the risk factors and disconnect in the story..

- Management has highlighted in the concalls/it's interactions that there is a clear trend of consolidation of vendors for the industry and MPS is on the right side of such trend

First, if the publishing outsourcing industry is growing at 15% (And if we believe so is the growth for relevant STE segment) and the peers/competitors are growing much faster as Mahesh has very succinctly highlighted with data from competition, then what explains the much slower growth rate for the company and still it ending up on the right side of the consolidation move? In order to be in right side on this trend, shouldn't it be growing at more than 15% in USD terms to support this hypothesis? Last 3 years, growth is much below this number.

- IF i am inferring correctly, the BQ/MQ sheet implies that MPS business has high entry barriers, the business is sticky and the there is limited competition.

How do we reconcile the above characteristics with the fact that the business faces and will continue to face the pricing pressure from the publishers as indicated by the management? In my limited understanding,if all the three above characteristics are present in a business , it is typically a price setter and not a price taker! As management indicates some whehre, their budget for outsourcing remains constant, However in the same budget, they will get more and more work done. This again is a disconnect, we need to factor in while assigning the business BQ category

The risk because of this as I see, tomorrow if the rupee appreciates significantly, will the pendulum shift in favor of smaller yet long existing players in the industry which have currency advantages thus hitting the twin blow to MPS/other players' businesses due to lower margins and negative operating leverage (due to lesser volumes)?

BQ Category: Personally, I feel that MPS belongs to a business with B+ quality with management smarts. If they are able to pull of the technological edge as per hypothesis and other players lag in that (as of now we do not have any evidence of proving that other players are not as strong in technology platform as MPS), it may move to A category business.

On lower organic growth I have slightly different take: I think, what is missed by the market today is small but incremental changes happening in terms of client inroad made (top 10 Client contributions), new "core vendor" status won (2 new wins recently), offering gap being filled in (Element and TSI acquisition). All these should be seen in the context of "low contrast effect" and the small incremental gains made from these developments will lead to a tipping point in couple of years which will propel into a higher growth trajectory of above industry growth rate.

Disclosure: Invested. Allocation- 7%; Average Buying price:330