Hi Gaurav,
The cash in the balance sheet is not there at consolidated levels. Also the sales and profit are doubling up in 5 years. Debt is increasing along with equity, so more capital infusion is not leading to value creation. Again a lot of it will be clear when the annual report will be dissected. Am I missing something in the numbers ?

It looks like the PI Industries story is NOT discovered [fully] by market participants YET.

1. As CSM revenues contribute 60% to PI revenues and are not dependent on domestic rainfall, the deficit rainfall impact on PI is not as much as it would likely seem. More over, PI has sufficient brand pull and farmer connect that its domestic agri business is less impacted when compared to its peers – Key differentiator when compared to its peers.

2. Looking into future, the contribution of CSM is going to go up which should further delineate PI business from monsoon vagaries though complete non-dependency is NOT possible.

3. Further confirmation on CSM revenues visibility should lead to PE re-rating of PI (compared to PE at the current price of 600)

4. The current Rupee depreciation should provide a bit fillip to its bottom line though I do not want to depend on such forex benefits as they are not sustainable in nature.

The current market price is surely a very good opportunity for accumulation and since I did not allocate fully, I’m buying into PI at this price by re-allocating capital from my existing portfolio (disclosure).

I also sold it close to 13500 in April (even though I predicted it to go to 16000 max, actually it touched 17000 later) since my view was that its appropriate entry price shud not be more than 8000! Maximum valuation I expected about 10000, but considering market always overshoots on either side, my safe purchase price was 8000 in April2015.
Lets see what Mr. Market offers !!

Persistent Systems – An innovation led Company is 25 yrs old run and managed by Anand Deshpande – a smart and a visionary leader. Its engaged in SMAC and enterprise digital transformation basically riding on value migration in IT industry. IT industry and especially the niche area it expertise in is a big scale opportunity. If you go through company 25 yr history you will find that many terms in IT industry like outsourced product development, cloud, analytics , social and mobility are coined by persistent systems much before Gartner did it and now enterprise digital transformation is the term they have come up with. Its ROE, ROCE, Profit margins, Debt free status are all decent over 10 yr period. Regular dividend paying company. Go through CLSA report or company’s website to understand more about it. I bought it at 404 cum bonus means 202 after bonus almost 2.5 yrs back.

Rallis India – Food security is a big theme – Value migration towards hybrid seed business, tata group company and RJ confidence, consistent ROE above 20% even in bad quarters and years, recently launched new varieties of hybrid corn and paddy, acquisition of Metahlix and turning it around, Market leader in many products in pesticides, herbicides etc after Bayer and Syngenta.