Investors with a long-term perspective and a
high-risk appetite can buy this stock at current levels and add on
every dip strategy. Investors can take exposure in the stock, considering the company's
ability to cater huge
opportunity in the market.
Company background:
Camson Bio
Technologies Limited is a leading agricultural biotechnology company. Camson
delivers innovative products to maximize agricultural productivity and
sustainability while reducing the environmental impact.
Founded in
1993, Camson combines traditional knowledge in agriculture with latest advances
in safety and protection to market a wide range of products. These include
hybrid seeds, bio-fertilizers and biocides that are non-poisonous, eco-friendly
and residue-free.
Camson has a strong focus on in-house research
capabilities, which has resulted in a successful portfolio of products over the
years. Its intensive research programs in these areas have helped it build a
wide-ranging product portfolio including 22b iocides, 7 bio-fertilizers and 17
hybrid seeds.
Visionary promoter to cater the huge opportunity in the
market:
Dhirendra Kumar, Managing Director and promoter of Camson
holds a M.Sc. in Plant Genetics and Breeding and an MBA in Marketing from
Punjab Agricultural University, India.
He also holds an MBA in Export
Management from IIFT, New Delhi. In his previous experience, as General Manager at ITC Ltd., Kumar took over a loss making division and reworked the entire product range, positioning and strategy to transform it into the fastest growing and most profitable division at ITC. Further, as the Marketing Manager at the Pioneer Seed Co., he held the distinction of leading the company to new heights in terms of market share and profitability. His previous experience also includes positions at Ranbaxy and Coromandel Indag. Recognizing the potential in environment-friendly technologies, Kumar has led Camson through various phases of growth and expansion in the last 17 years, including the company’s IPO in 1995.
Share holding pattern:
Promoters 31.56
Mutual Funds and FIIs 06.33
Corporates 12.30
Non Resident Indians 07.06
71 Individual shareholders in excess of Rs. 1 lakh 17.28
So, the weaker hands having the stake of around 24% and
is going to change hands before it skyrocket.
Concerns:
The company
is not having good corporate governance in terms of its internal cost systems
as auditors pointed out in their reports. In last couple of years the company
is showing huge expenses on its balance sheets. It is a concern of internal
control system. Why the company is going to spend such huge amounts for
rebates, business promotions?
2011-12
|
2010-11
|
|
Rebate & Discounts
|
168632446
|
137826293
|
Commission
|
5137126
|
2377308
|
Business Promotion
|
174668633
|
131898011
|
Total
|
588942206
|
496245137
|
Still, the
company is under the one man show, i.e., of the Dhirendra Kumar. If it wants to
become the market leader in this sector then company should not depend more on
a person hence, some other reputed persons subjected to this sector should join
the management will give cushion to the shareholders dreams.
The
management needs to have a priority to change its lapses in this, otherwise it
erode all the reputation what it has gained since,1993.
Recent Events:
Appointed Mr.Santhosh Nair as CEO who has vast experience
in banking space who worked for Merrill lynch and HDFC. Camson appointed
suitable persons in suitable places like changes in Chief corporate development
officer, Company Secretary and Chief Legal Officer, as the Compliance Officer
of the Company.Promoters converted the warrants in
to equity of each Rs.75/- and some of the promoter also buying small quantity
in the open market in the recent times. The company increased authorized share
capital and given employee stock option scheme for the year 2012. The Company has entered in to a Business Correspondent
Appointment MoU with HDFC Bank. In tandem with RBI's directive about assisting
farmers through the financial inclusion initiatives of banks, Camson has
entered into an arrangement with HDFC.
Be and Make’s View:
In my view, the sector has huge potential and company is
well poised to cater the huge opportunity. As hybrid seeds on an average account for only
20% of the total vegetable seed market, there is 80% or INR 20 bn unexplored
market which hybrid seed companies can tap in the years to come. Increasing
public awareness of serious long-term health hazards posed by chemical
pesticides and considering very low penetration levels (of ~3.5% based on
global pesticides market) biocide companies are looking at better future
prospects. In the upcoming decades it is the sun rising sector and one can have
this small cap stock in small quantities to have multifold returns. The company
had very good CAGR growth in top line and bottom line in last five years. The
PE and Debt to equity ratio is also very encouraging. The other key parameters
like ROE, ROCE are also in the positive side. The company already completed its
CAPEX and enhanced its capacity at the end of the FY12 and its results likely
to come in to the top and bottom lines in the upcoming quarters. It is a long
term bet, trading in BSE only and having low liquidity one should buy it in
small quantities and can add in every dip and hold it for long term.
With thanks
Be and make
1 comment:
Sounds like a great stock pick.
Post a Comment