This company seems to hidden gem which is growing consistently and now have successfully expanded in other countries to with optionality of margin expansion in higher probability, as long as they don’t shoot themselves in the foot, this is gonna be one in kind of investment
This company ticks various great characteristics in my opinion
Selling an essential item
Having better pricing than of peers (therefore I consider this has some sort of moat in terms of farmer relationship and backward integration – need understand and find what’s their moat)
Good WC management
Expanding from their internal accruals
Cash rich company
Margin expansion oppertunity through VAP, foraying to higher margin countries, and VAP in those countries too.
It is non cyclical business imo
Neutral characteristics of the business:
The volume growth may not be high in the long run, because such is the nature of the business, it should be in line with population growth after reaching certain size ( terminal value). – However this is mitigated by the expanding in other countries
Cons:
They need to/have to manage their over procurement and keep the inventory losses and provision in check.
Should be Producing VAP as per demand, instead of overshooting the forecast of demand
All in all, this seems to be great investment and accumulate on dips
A special thanks to Mr @Sumit_Agarwal for starting this thread and @ranvir for regular detailed notes updates very useful for me, really appreciate the hard work
A request as well from my side to you, and for all community members,
To have a contra view, kindly state their points why this could be a bad investment and could turn into one
So that we can track that better in a way like an Anti checklist, because I couldn’t think much in terms of fragility
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