Categories

10000 to 4crs in 18 months 1000rs to 50crs 300% returns 75% promoter holdings A 50 bagger A sureshot 5 bagger Analysis Another fraud? Auto ancillaries Bank sector Blind sell Brand plays Broking Bse Nse Buy calls cements Ceramics/tiles Counters I don't like Debt free businesses Delisting candidates demerger bets Disclosure- I own them Domestic consumption plays E-Commerce pick Education Exit at rallies Famous analysts Famous stocks FMCG Footwear future multibaggers Gems andJewellery Hidden gems High conviction ideas High dividend plays High potential small caps High ROE stocks Holding companies Hotel sector How they looted you.. Indian stock market Infrastructure sector Interesting Microcaps IT KPO Landbank plays largecap ideas Less than 5 PE stocks Liquor Logistics Market lessons Market outlook for 2013 and 2014 Market underperformers Meeting with the CEO Metals Monopoly businesses My 5 baggers My Favourite counters My paid stock recommendations My stock picking techniques nse bse tips Oil exploration Operator calls Paints Penny stock outlook penny stock updates Pharma sector Poultry stocks PSU Publicity freaks Real estate Renewable energy plays Safe bets Sell recommendations Share market Live shipping stocks short term call SOTP plays stock tips stock under 10rs Stocks to watch out for Strong bonus candidates Takeover candidates TATA product tea Textiles The 13 bagger The 45 bagger Trading companies Transformers Turnaround bets Tyres Uncertain/Risky business models Unique businesses

Search This Blog(Over 800 companies covered in the blog).

Please note

Note: The artciles are not research reports but assimilation of information available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that I might have the dkiscussed companies in my portfolio and hence my point of view can be biased.Readers should consult registered consultants before making any investments
.

Archives : Old artciles

Thursday, September 10, 2009

Future growth prospects and outlook of Ruchi Soya, JVL Agro, KS Oils, Sanwaria Agro and Gujarat Ambuja Exports

After a subdued fiscal''09, the vegetable oil industry is likely to see a recovery on account of consumer demand.It was a healthy 2007-08 for the vegetable oil industry, but the downturn in the following year caused due to a fall in consumer demand and high input prices, hurt financials. However, today, the industry can already smell the aroma of recovery this year with rising consumer demand and its increased thrust on branded and value-added space yielding positive results.The big five players in the sector - Ruchi Soya, JVL Agro, KS Oils, Sanwaria Agro and Gujarat Ambuja Exports - saw their aggregate net profit fall by 14% in 2008-09 on 15% higher aggregate sales due to rising prices.The high volume-low margin nature of the business took its toll on the companies during the December 2008 quarter when their operating margins were hit the most due to a drop in consumer demand for vegetable oil and poultry demand for the largely-exported oilmeal.High prices of oilseeds also increased their procurement costs. Oilmeal exports were down 49% to 15.8 lakh tonnes during January-April 2009 compared to the corresponding period in the previous year on declining production of meat and lower demand for compound feeds and, thus for oilmeals, according to the Solvent Extractors'' Association of India.While the operating margins collapsed for all the five large companies during the December quarter, only a handful, such as KS Oils and Sanwaria Agro, could salvage their profit margins in the March quarter. KS Oils recovered fast because the company commands a dominant share of the less-cluttered mustard oil market and has a prominent presence in the branded market, securing 40-50% of its edible oil revenues from the branded business.

Last year''s downturn has changed the way vegetable oil companies run their business: not only have the large players started building brands and manufacturing value-added derivative products such as soya granules and soya nuggets, they are now also selling their branded products to the new retail chains and contract-manufacturing for their private labels.Lower duties too have played a role in changing the fortunes of the industry. The zero customs duty on crude palm oil and the recent scrapping of 20% import duty on crude soybean oil have made it cheaper for the companies to import and refine oil than buy oilseeds locally for crushing and then refine the oil. Also, this being an off-season for kharif oilseeds, profit margins in the import business are better as compared to the domestic business of procuring oilseed and processing it into oil.Another positive sign for the investor is that large players such as KS Oils, Ruchi Soya and Sanwariya Agro are planning capital expenditure to fund capacity expansion. KS Oils is going ahead with its backward integration project to develop palm plantations in Indonesia and Malaysia. For this, the company recently announced its plan to raise Rs 450 crore, and has received a term-sheet commitment of Rs 390 crore from its promoters and the three private equity investors. Similarly, Ruchi Soya has raised Rs 350 crore, by issuing Rs 245-crore preferential warrants to promoters and Rs 105-crore preferential equity shares to foreign institutional investors. Sanwariya Agro is planning to raise Rs 100 crore for manufacturing value-added soy derivatives.The next quarter is likely to be better for the sector with a possible recovery in operating margins. Companies establishing presence in branded space in oil and oilseed derivatives stand a better chance of growth rather than ones that operate in the unbranded space or are only into pure-play trading.

Important Disclaimer&Privacy policy

This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: arunsharemarket@gmail.com Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.
 
x

Subscription to Arunthestocksguru

Enter your email address:

Delivered by FeedBurner