You’re right about December being a good quarter for seeds. However, last year’s 37% margin for Mangalam Seeds is still a head-scratcher. It’s interesting to note their similar slump in March 2022, which is when Kaveri maintained positive YoY sales growth. This suggests last March’s results might be an anomaly for Mangalam Seeds.
Here’s where the comparison gets tricky: Kaveri focuses on cotton seeds in central and south India, while Mangalam deals in grains primarily for the western region. A more relevant competitor for Mangalam might be Bombay Super Hybrid (BSH) which deals in vegetables. Unlike Mangalam, BSH achieved rapid growth through lower margins. This suggests Mangalam could potentially achieve similar growth by strategically adjusting margins, as long as they manage their debt effectively.
Overall, it seems Mangalam Seeds is in a similar phase they faced in March 2022, but with the added burden of higher debt. Their financial health depends on managing this debt while potentially adjusting margins for strategic growth. If they can navigate these challenges, Mangalam has the potential to excel.
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