I think for durations less than 1 year, it is better to look at absolute returns.

Thanks for these valuable inputs!

Being diversified is not a negative by itself so long as the parent is committed to the product line in question, several large Japanese / Korean companies are diversified (or Reliance, in India). As far as I can see the parent’s Crop Protection business is doing well and made a profit of 30.9 billion Yen in a difficult year when many others in the sector have reported losses.

The parent’s losses came from other verticals like Chemicals & Plastics, and Pharma. I look at this as a positive for SCIL, since it improves the relative importance of Crop Protection within the parent’s portfolio. In fact, the guidance for 2024 is to double the profits of Crop Protection to 62 billion Yen, as the above table shows. In their presentation, the parent refers to Agrosolutions and ICT as “growth drivers” and “flagship domains” (see below).

I think the last three years have witnessed large scale distortion across the entire chemical / pharma / agrochemical space, first due to a huge spurt in prices amid covid lockdowns and supply chain shortages, and then the dramatic fall last year once the Chinese supplies resumed. All numbers for the last 3 years must be viewed with this caveat. Many companies with significant international exposures have made losses (take UPL, for example) and Sumitomo parent is not an exception. They were in profit in FY22, and guidance for FY24 is also for a profit.

The Debt / Equity ratio of 1.4 – not very high by itself – should also be viewed in this context. It was much lower prior to this crisis and is expected to go down as situation normalizes. See the chart below.

Still if they sell off other businesses to reduce debt, that again is a good thing as it just increases the importance of agrochemicals for them. And when the management says they would like to make India a manufacturing hub – as it seems from the recent pronouncements – that would override these temporary (hopefully!) issues and make SCIL more valuable for everyone in the long run, I think.

As regards new product discoveries and volume data, the company does seem to have an extensive R&D as is apparent from their public website / ARs etc. But I am not able to locate the precise data points you mentioned, can you please share the source of your information so I can investigate this aspect further. Thanks in advance!

While promoter selling stakes isn’t necessarily bad, for they can do so for myriad reasons just thought it is worth pointing. Took entry recently more as a technical bet coming out of a decent 3 month consolidation.

Why the email? You can share it here.

And does your XIRR model incorporate all the corporate actions like dividends, buybacks, splits, bonuses?