The Great Indian "Bull" Market

The Ongole Bull is a majestic animal and is large with a heavy build. They are attentive and attractive with broad foreheads and no hollows in the temples. With black muzzles with wide nostrils, muscular wide jaws, large flaccid eyes and alert ears, they have horns that are short and stumpy. The neck is thick with large loose dewlaps. The hump is the most imposing part of the Ongole Bull. It is large, round and splendid. The animals have strong legs with black hooves that are squarely set under body.  Nose string is seldom used for Ongole bulls are docile.

The Ongole Bulls, found in a small region between the Gundlakamma and Alluru rivers in the Ongole and Kandukur talukas of Andhra Pradesh in an area no larger than about 100 square miles, are world famous stud bulls. 

Ongole bulls have gone as far as America, Holland, Malaysia, Brazil, Argentina, Columbia, Mexico, Paraguay, Indonesia, West Indies, Australia, Fiji, Mauritius, Indo china and Philippines. The Brahmana bull in America is an off-breed of the Ongole. An Island in Malaysia where there are many Ongoles is named as Ongole Island. The population of Ongole off-breed in Brazil is said to be around several millions.

Cattle populations worldwide (2009)

 The mascot of the 2002 Indian National Games was Veera, an Ongole Bull.

Ongole bulls are particularly conspicuous with respect to their biometry. They are heavily built weighing approx. 567.6 kgs at a height of 1.5 meters, with a body length of 1.6 meter and girth measuring 2 meters. The bulls look majestic, royal, attractive and alert. The Ongoles are fine, docile and suitable for heavy draught. Ongole cattle perform under varying environmental conditions due to their adaptability and are unique triple purpose cattle of the tropics that serve as draught, milk and meat animals. 

The Ongoles are with muscular body, short neck, and long limbs. The popular coat colour is white with dark grey markings on head, neck, and hump and black points on the knees and pasterns of both fore and hind limbs. The skin is medium thick. The head is long with a relatively flat forehead. The ears are moderately long and slightly drooping. Muzzle is well developed with fairly wide nostrils that are black in colour. The eyes are moderately large, elliptical in shape and bright. The legs are strong and clean, toes of the foreleg pointing straight forward, the curve of hock not too straight or too curved. The horns are short and stumpy, growing outwards and backwards and are thick at the base. The horn length (typical) of a good breed normally is below 3 inches (resembling Nandi). The hump of the bull is well developed, open and erect. Dewlap   and sheath are moderate to large sized. Tail is of moderate length and thickness with a black switch reaching about half way between the hocks and the ground. In fact the statue of Nandi is the image of a perfect Ongole bull, for example the large Nandi statue in Andhra Bhavan, New Delhi. Villagers in that region grade bulls based on standard features.

World wide the Ongole bull is better known by its American off-breed "The Brahman Bull"

Brahmani  it seems is the system of maintaining the pure bloodlines of the Ongole bull.

The Brahmani System:

A stud bull is selected through rigorous procedures by a group of village experts and is dedicated to the temple of the village deity. Sometimes the purchase cost of the bull is born by a rich family of the village in memory of their elders. Once the bull is dedicated to the temple, the bull is the property of   the village and is set free. The bull is not prevented if it enters into a crop field, is allowed to feed and it leaves on it’s own. The bull sired the village herd free of cost. This custom was prevalent throughout Ongole breeding tract. Thus the brahmani custom helped selective breeding because of which maintenance of pure blood lines of Ongoles became possible.

Percentage of Cattle projected as Brahman or Brahman influenced cattle: (2011) 

Australia: Cattle Population: 28 million, Brahman influenced: 51%

Brazil: Cattle Population: 200 million, Brahman influenced: 1% (Very strange low number)

Columbia Cattle Population: 23 million, Brahman influenced: 75%

Ecuador Cattle Population: 5 million, Brahman influenced: 80%

Mexico Cattle Population: 23 million, Brahman influenced: +50%

Namibia Cattle Population: 2 million, Brahman influenced: +70%

Philippines Cattle Population: 3 million, Brahman influenced: 95%

South Africa Cattle Population: 15 million, Brahman influenced: 60%

USA Cattle Population: 110 million, Brahman influenced: 30%

Pls note only Australia, Brazil, Columbia, Eucador, Mexico, Namibia, Philippines, South Africa and USA participated in this survey and 23% of the cattle was projected as Brahman influenced cattle. Brazil numbers seem to be suspect (1%) as Brazil is one of the largest importer of Indian breeds and also one of the largest exporter of "Brahman" bulls to the world.

From Outlook Article (Outlook article Link)

Andhra’s Ongole bulls are prized as they are said to be resistant to mad cow disease

Concerns abound about illegal acquisition of genetic material. Recently, a middleman paid Rs 35 lakh for a bull. Healthy bulls sell for crores in Brazil.

Great demand also for Gir and Kankrej species of cattle from Gujarat for their high milk yield

Satyajit Khachar, a cattle-breeder from Jasdan in Gujarat who specialises in the Gir variety, says that every 10-15 years the Brazilians “need infusion of fresh blood from the parent country to retain vigour”. With Brazilian partners, he runs Brazil India Ltd that has exported 200 embryos of the Gir breed in the last two years. Khachar claims he has the necessary clearances from the state/central animal husbandry departments. The long-term plan is to recreate the Gir breed, known for its high milk yield, there. “I expect more than a million USD (over Rs 4.5 crore) for a good Gir bull in Brazil,” 

Conclusion: The Great Indian "Bull" Market it seems is well known in cattle rearing circles. Indian exports are more than just IT resources. Bio diversity is one of the greatest assets. For instance raw onions contain more antioxidants than Red wine but its something that is never marketed maybe because the largest exporters of onion are China and India.

Reference Links

http://dmrsekhar.sulekha.com/blog/post/2007/07/ongole-and-the-bulls.htm

http://www.karumudi.com/ongolebull

http://www.ansi.okstate.edu/breeds/cattle/brahman/

http://www.brahman.org

http://www.brahman.co.za

http://www.brahman.com.au/

http://www.brahman.com.au/

Jayant Agro Organics: Bio Plasticisers Surge in demand

Solvin is a 75% Solvay and 25% BASF owned PVC resin manufacturer. Plasticisers  and Phthalates are additives used to increase flexibility of PVC.

 In europe low molecular weight Phthalates are subject to restrictions by EU Legislation. low molecular weight phthalates are classified as "Substances of Very High Concern" (SVHC)

Manufacturer or importer must provide information to the recipient. As a minimum, recipients – meaning anyone in the supply chain from distributors and retailers to professional end-users - need to be told that the article contains one or more of the substances. Further down the supply chain, retailers also have an obligation to provide the same information to consumers, but only if a consumer requests it. A retailer has 45 days to provide the information.

The basic purpose of these test, it seems... is to verify the ability of Solvin resins to work with these new "bio-based plasticisers" The surprising fact is that "Jayant Agro organics also has submitted 100% castor based plasticiser "Di-Caprylsebacate" DOS/DCS.  I have extracted only 15 slides.. the original document was 31 slide document (link to original document) 

here are the slides which I though could summarize the whole thing

(REACH) Registration, Evaluation, and  Authorisation of CHemicals (Info link)

REACH Timelines for plasticiser (link)

Candidate List of Substances of Very High Concern (SVHC) for authorization (Link)

Biotor promoters seem to be having a good lunch.. though the company will be in doldrums (Link)

Conclusions: I really dont know what benefit Jayant gets since DCS/DOS is widely produced in China (as per my google searches.. ) yes these EU guidelines will increase the demand for DCS and other bio-based plasticisers. Jayant is somewhat uniquely placed as India is the largest producer of Castor in the world. 

Jayant Agro Organics Archives

Father Forgets: W. Livingston Larned

FATHER FORGETS

W. Livingston Larned

condensed as in "Readers Digest"

Listen, son: I am saying this as you lie asleep, one little paw crumpled under your cheek and the blond curls stickily wet on your damp forehead. I have stolen into your room alone. Just a few minutes ago, as I sat reading my paper in the library, a stifling wave of remorse swept over me. Guiltily I came to your bedside.

There are the things I was thinking, son: I had been cross to you. I scolded you as you were dressing for school because you gave your face merely a dab with a towel. I took you to task for not cleaning your shoes. I called out angrily when you threw some of your things on the floor.

At breakfast I found fault, too. You spilled things. You gulped down your food. You put your elbows on the table. You spread butter too thick on your bread. And as you started off to play and I made for my train, you turned and waved a hand and called, "Goodbye, Daddy!" and I frowned, and said in reply, "Hold your shoulders back!"

Then it began all over again in the late afternoon. As I came up the road I spied you, down on your knees, playing marbles. There were holes in your stockings. I humiliated you before your boyfriends by marching you ahead of me to the house. Stockings were expensive-and if you had to buy them you would be more careful! Imagine that, son, from a father!

Do you remember, later, when I was reading in the library, how you came in timidly, with a sort of hurt look in your eyes? When I glanced up over my paper, impatient at the interruption, you hesitated at the door. "What is it you want?" I snapped. You said nothing, but ran across in one tempestuous plunge, and threw your arms around my neck and kissed me, and your small arms tightened with an affection that God had set blooming in your heart and which even neglect could not wither. And then you were gone, pattering up the stairs.

Well, son, it was shortly afterwards that my paper slipped from my hands and a terrible sickening fear came over me. What has habit been doing to me? The habit of finding fault, of reprimanding-this was my reward to you for being a boy. It was not that I did not love you; it was that I expected too much of youth. I was measuring you by the yardstick of my own years. And there was so much that was good and fine and true in your character. The little heart of you was as big as the dawn itself over the wide hills. This was shown by your spontaneous impulse to rush in and kiss me good night.

Nothing else matters tonight, son. I have come to your bedside in the darkness, and I have knelt there, ashamed! It is feeble atonement; I know you would not understand these things if I told them to you during your waking hours. But tomorrow I will be a real daddy! I will chum with you, and suffer when you suffer, and laugh when you laugh. I will bite my tongue when impatient words come. I will keep saying as if it were a ritual: "He is nothing but a boy-a little boy!"

I am afraid I have visualised you as a man. Yet as I see you now, son, crumpled and weary in your cot, I see that you are still a baby. Yesterday you were in your mother's arms, your head on her shoulder. I have asked too much, too much, yet given too little of myself. Promise me, as I teach you to have the manners of a man, that you will remind me how to have the loving spirit of a child.

10 largest oil fields in the world

This is a recent article from 24x7 wallstreet. I liked the info and decided to copy it. Here is the link to the original article (Link)

Figuring out how much oil is left in the world and where it is located seems more important than ever, especially considering the political instability in many of the oil-producing countries. 24/7 Wall St. used the most recent public information available to identify the largest oil fields in the world. Those who call for America to end its dependence on foreign oil would be relived to hear the U.S. actually has the world’s largest oil reserve, albeit in oil shale — oil that is in rock form. If prices go high enough, however, and the supply dries out, extracting that oil could become commercially viable.

There are more than 40,000 producing oil fields dotted around the globe, though most are relatively small. Just 100 to 125 giant or supergiant oil fields supply approximately 50% of the world’s oil. A giant oil field is one that contains more than 500 million barrels of recoverable oil. A supergiant fields holds more than 5 billion barrels of recoverable oil. 24/7 Wall St.’s ten largest oil fields in the world are all super giants.

Interestingly, the largest deposits ever found are not liquid oil at all. They are either an asphalt-like substance called tar or oil sands, or rocks called oil shale. The vast size of these “unconventional” resources is matched only by the vast complexity and cost involved in turning them into liquid petroleum.Finding new giant and supergiant oil fields brimming with cheap, easy-to-extract oil is surely a historical phenomenon, and the number of new discoveries — of any size — is dwindling. In addition, the largest recent finds are under miles of water and seabed, in some unconventional form or in some inhospitable, usually arctic, climate. The effort required to tap these fields will involve mountains of capital and years of work. No doubt, we need to be prepared to deal with a new reality where oil isn’t as cheap or abundant.

24/7 Wall St. looked at conventional oil fields, like those found in the Middle East, and unconventional oil fields, like oil shale found in the U.S., to come up with a comprehensive list of the largest oil deposits in the world.

These are 24/7 Wall St.’s ten largest oil deposit in the world:

10. Ferdows

> Country: Iran

> Est. Total Resource: 31 billion barrels

> Est. Remaining: 31 billion barrels

> Discovery Date: 2003

Iran’s Ferdows field is located about 50 miles offshore of the country’s Bushehr province. Together with two other fields in the group, Mound and Zagheh, the three are believed to hold 38.5 billion barrels of oil. Ferdows also contains trillions of cubic feet of natural gas, and Iran has signed an agreement with a Malaysian company to develop a natural gas liquefaction plant that could be in operation by 2014. U.S.-led sanctions against Iran have made it difficult for the country to develop its substantial oil reserves and its even more substantial natural gas reserves.

9. Carioca-Sugar Loaf

> Country: Brazil

> Est. Total Resource: 33 billion barrels

> Est. Remaining: 33 billion barrels

> Discovery Date: 2007

Carioca-Sugar Loaf is one of three supergiant discoveries in the Santos Basin offshore of Brazil. At an estimated reservoir size of 33 billion barrels, Carioca-Sugar Loaf is four to five times the size of the other two fields in the basin — Tupi and Jupiter — each of which is believed to hold 5-8 billion barrels of total resource. Brazil’s state-controlled oil company, Petrobras, recently announced that it would spend a staggering $225 billion to develop its Santos Basin reserves — and even that might not be enough. The reservoirs are located in water that is more than 5,000 feet deep and below 25,000 feet or more of sea floor. These figures represent a serious technological challenge. There is no firm data yet on how much of the oil in place could ultimately be recovered.

8. Cantarell> Country: Mexico

> Est. Total Resource: 35 billion barrels

> Est. Remaining: 4 billion barrels

> Discovery Date: 1976

Cantarell is the largest conventional oil field ever discovered in the western hemisphere. Some attribute the field’s formation to the same asteroid impact that is believed to have caused the extinction of the dinosaurs. Production from Cantarell has fallen dramatically since 2003, when production peaked at 2.1 million barrels/day. The field produced about 500,000 barrels/day at the end of 2010 and is expected to drop below 400,000 barrels/day at the end of this year. Like the number five field on our list, Burgan, Cantarell is not expected to be productive beyond the end of the decade.

7. Kashagan

> Country: Kazakhstan

> Est. Total Resource: 38 billion barrels

> Est. Remaining: 7-9 billion barrels

> Discovery Date: 2000

Kashagan’s discovery in the northern Caspian Sea in 2000 was the largest new conventional field found since Prudhoe Bay in 1968. Development of Kashagan has been delayed by high costs and serious environmental concerns. The original budget called for development costs of $57 billion, but the figure was raised in 2007 to $136 billion because the technical challenges of extracting the oil are significant. First, the reservoir fluid contains a high concentration of a very corrosive compound. Not only does it destroy the equipment, but if allowed to escape, it could devastate the unique ecosystem of the area. Second, the field is located in relatively shallow waters that freeze in the winter. Third, reservoir pressures are very high, which combined with the high levels of toxic gas, creates an expensive safety issue. Production is expected to start in 2012, but this date could well be pushed out again.

6. Bolivar Coastal> Country: Venezuela

> Est. Total Resource: 44 billion barrels

> Est. Remaining: 14 billion barrels

> Discovery Date: 1917

The Bolivar Coastal field is really a complex of large and small reservoirs around the northern and eastern edges of Venezuela’s Lake Maracaibo. The largest reservoir is Tia Juana, where the total resource was originally put at 15 billion barrels. The entire Maracaibo Basin is thought to hold up to 44 billion recoverable barrels, of which about 30 billion have been extracted through 2006. Of the fields on this list, the Bolivar Coastal has been in production the longest.

5. Burgan> Country: Kuwait

> Est. Total Resource: 150 billion barrels

> Est. Remaining: 6-25 billion barrels

> Discovery Date: 1938

Burgan, Kuwait’s largest field, resembles the number four field on our list, Ghawar, in its massive size. But unlike Ghawar, it fails the longevity test. Production from Burgan has fallen since the 1991 Gulf War ended, when retreating Iraqi troops set fire to some 700 wells in the field and an estimated 600 million barrels of oil went up in smoke. The field has never recovered and officially entered depletion in late 2005. The fires, coupled with the feckless Kuwaiti government, likely will have the second largest conventional field ever found dry in the next decade or so. Accurate and independently verified numbers on Burgan are not available.

4. Ghawar

> Country: Saudi Arabia

> Est. Total Resource: 162 billion barrels

> Est. Remaining: 11-45 billion barrels

> Discovery Date: 1948

Ghawar is the undisputed heavyweight champion of conventional oil fields. Since beginning production in 1951, the field has given up an astounding 55 billion barrels or so, and still produces at around 5 million barrels/day. Production is enhanced by water-flooding, with about 7 million barrels of seawater pumped into the field every day to force the oil out. The Saudis believe that Ghawar can produce another 125 billion barrels, more than twice its total production after 60 years. There has been no independent verification of any Saudi field since the country fully nationalized its oil resources in 1975, and there is a lot of skepticism over the Saudis’ claims for Ghawar. Still, it could easily rank as the eighth wonder of the world.

>3. The Alberta Oil Sands> Country: Canada

> Est. Total Resource: 173 billion barrels

> Est. Remaining: 169 billion barrels

> Discovery Date: 1980

The Western Canada Sedimentary Basin covers about 540,000 square miles and contains a total of 173 billion barrels of resource in what are called oil sands. Unlike the shales in the American Piceance and Uinta Basins, the Canadian oil sands are already being mined and refined into conventional oil. There are more than 20 active projects in the province of Alberta, most located near Fort McHenry, site of the largest of the three oil sands deposits in the WCSB.

2. The Orinoco Belt> Country: Venezuela

> Est. Total Resource: 1.3 trillion barrels

> Est. Remaining: 530 billion barrels

> Discovery Date: 1930s

The Orinoco Belt in Venezuela is estimated to hold some 1.3 trillion barrels of oil in place, according to a recent survey by the U.S. Geological Survey. Venezuela now claims it has 297 billion barrels of total reserves, putting it ahead of Saudi Arabia, which is estimated to hold reserves of 265 billion barrels. The Orinoco Belt contains both a heavy sulfurous oil and deposits of tarry oil sands similar to the Canadian variety, though somewhat less viscous. It is nasty stuff, but there is lots of it. In fact, only a bit more than a third of the total is recoverable by today’s technology and economic requirements.

1. The Piceance & Uinta Basins

> Country: USA

> Est. Total Resource: 2.855 trillion barrels

> Est. Remaining: 2.855 trillion barrels

> Discovery Date: 1912

The Piceance and Uinta Basins in western Colorado and eastern Utah are estimated to hold oil shale in place of 1.525 trillion barrels and 1.32 trillion barrels, respectively. The catch is that the stuff is not really oil at all, but rock containing kerogen, a precursor to oil. In a few hundred million years the rock would be converted to flowing oil naturally, if it were left alone. These basins, along with another in southern Wyoming, were added to the U.S. Naval Petroleum and Oil Shale Preserves in 1912, although Native Americans had used the flammable rocks for centuries. The total area covered by the deposits is about 16,000 square miles, an area larger than the states of New Jersey and Connecticut combined. Whether the oil shales are ever developed depends largely on the price of crude and how much environmental impact people are willing endure.

Author: Paul Ausick

Link to original article Link

Conclusion: Well we already know that there is no oil left. the question is that the information is being "let out" to the public. Its now slowly entering the public domain .. which basically means the wheels have been set on motion. One must be very careful with his/her investments and how you want to protect/safeguard your family. We are living in interesting times "No doubt about that". Also with the Fed refusing to start the next Quantitative Easing "QEx" I personally feel the banks will have to start taking some risk and start lending the trillions of dollars that FED has pumped into their books by buying out "bad debt" A slight increase in interest rates and the FED bonds would be worth a lot less. We might in fact see a consistent rise in stock prices.

Peak Oil Archives

Gujarat Ambuja Exports: Promoters buy 10,000 shares @ 23.08 on August 26,2011

As per SEBI Disclosure norms promoters of GAEL have bought 10,000 share on August 26,2011

Shares Bought in BSE: 5000 total amount: Rs 1,15,391.00 ie @ 23.08

Shares Bought in NSE: 5000 total amount paid: Rs 1,15,436.00 ie @ 23.09

Trade done through: ASE Capital Markets

Promoter name: Manish Kumar Gupta

% Share holding before: 24.68% (3,41,55,278 shares)

% shareholding after: 24.69% ( 3,41,65,278 shares)

Gujarat Ambuja Exports: Uttarakhand 1MW BioGas Plant-Maize processing unit

Dated: May 26,2010
Innovative has completed commissioning of its BioskrubberTM system at the new maize processing unit of Gujarat Ambuja Exports Ltd (www.ambujaglobal.com)at their Uttarakhand Plant.

The Hydrogen Sulphide (H2S) free clean biogas from BioskrubberTM system will be utilised for electrical power generation by feeding into the 100% biogas based genset.
The power plant is of 1 MW capacity for its captive use
The BioskrubberTM system is giving an output Hydrogen Sulphide(H2S) content of less than 50 ppm as against the design parameters  of less than 200 ppm.

Gujarat Ambuja Exports: Himmatnagar 1MW Bio Gas from Maize Starch Liquid Waste

As per Gujarat Energy Development Agency Gujarat Ambuja Exports has set up a Biomethanation plant. Plant is Completed & commissioned in Dec'2009 under MNRE(Ministry of New & Renewable Energy) Waste To Energy (WTE) scheme.Plant has been running successfully since its commissioning date.Produced Biogas is used in 100% Biogas engines in captive power plants.
Plant Location: Dalpur, Himmatnagar

Ruttonsha International Rectifier: Value Buy.

Ruttonsha Internationa Rectifier

CMP: 13

Market Cap: 9.04Cr

Sales TTM: 24.52Cr

PBDIT TTM: 4.31Cr

Net Profit TTM: 1.45Cr

Reserves March 2011: 3.77Cr

Debt 8.6Cr

ROCE March 2010: 13.15%

Website: www.ruttonsha.com

Annual Report March 2010

Ruttonsha International Recitfier was incorporated in 1969 and became a public limited company in 1992 and listed in BSE. Ruttonsha produces high power semiconductor devices, silicon control rectifier, power rectifier such as bridges, modules, diodes, thyristors in the range of 6Amp to 6000Amps and voltages upto 5000Volts.

There has been a management change old promoters "Ruttonsha" have sold their shareholding to "Mehta's" 

With the management change Ruttonsha International Recitifier (RIR) has been paying dividends. Promoters own 73.13% of shares.

There are only 4000 shareholders and even 2 public shareholders with 4.46% shares are Mehta's. Very low public shareholding well established in its area of business. +ve operating cash flows. The stock is unknown and under owned. Dividend record date is Sept 24-Sept 26, 2011. Dividend is 75 paisa at current prices Rs 13 the dividend return is an easy 5.7% (in 1 month) 

Conclusion: Very low liquidity so difficult to accumulate stock. stock price should rise as the promoters seem to be more investment friendly, company is well established in its area of business. Semiconductors are efficient energy devices and their use should increase with time.

Gujarat Ambuja Exports: June 2011 Result Review.

GAEL: 

CMP: 23

Market Cap: 317.52Cr

Sales TTM: 2038Cr

PBDIT TTM: 156.64Cr

Net Profit TTM: 94.82Cr

Debt March 2011: 233.38Cr

Reserves: March 2011: 478.71Cr

GAEL June 2011 Results are as follows:

1. The Year on Year basis is the right way to look at the results as agro processing industry is dependent on harvesting seasons so Quarter on Quarter comparison leads to wrong conclusions.  The Year-on-Year data is as follows: 

- Sales up by +30.28%

- Expenditure up by +32.47%

- Other Income down by -44.02%

- PBDIT up by +7.5%

- Depreciation down by 4.24%

- Interest up by +142.06%

- Taxes up by +7.77%

- Net Profits up by +0.15%

Observations: 

- Topline growth at 30% indicates there is ample demand for products

- Expenditure has increased more than sales(32.47%).. indicates slight input cost pressures. 

- Interest rates have increased phenomenally. GAEL has less than 10Cr of long term loans, most of the debt (233Cr) is working capital loans for GAEL, the effect of RBI high interest rate policy can be seen in GAEL's income statement.

- Depreciation has reduced which could indicate that new capacity creation is down or the high interest rate scenario is delaying capacity addition.

- Tax increase (7.77%)though higher than PBDIT (7.5%) it is a small amount. GAEL management has been conservative and has always reported higher tax outflow which results in March Quarter reporting almost Zero tax.

- Net Profit Increase has been a pittance 0.15%  Its almost symbolic in nature.

2. On a segmented basis Topline (Sales contribution of various segments)

- Agro Processing Division:  contributed 52.31% 

- Maize Processing contributed 30.51% 

- Cotton yarn contributed 16.42%

- Windmill contributed 0.76%

Observation: 

- Agro processing division has always been the largest contributor. This division has seen a 45.93% increase in sales on a Y-Y basis which is huge.

3. Profit Margins: Profit margins are a percentage of sales.. The margins for each division are.

- Agro Processing Division 2.16%

- Maize Processing Division: 17.92%

- Cotton Yarn Division: 0.81%

- Windmill Division: 72.64%

Observations: 

- Agro Processing division margins (2.16%) are better than June 2010 (0.60%) this improvement is on top of 45.93% increase in sales which is very heartening considering June & Sept are cyclically the worst quarters for agro processing division. This also indicates good demand for products of Agro processing division (cooking oil, wheat, animal feed, deoiled cakes)

-  Maize Processing Division margins at 17.92% is the same as last year (June 2010: 17.91%)

- Cotton Yarn as such has done poorly barely scraping through.

- Windmills Division looks like had a bumper "Windfall" profit margin increased to 72%

Here is another look at the data from Maize processing division. Let us see the contribution of Maize Processing division to the PBIT of GAEL.

Maize Processing division contribution to the PBIT of GAEL

- Year ending March 2010: 42.88% of profits

- Year Ending March 2011: 54.97% of profits

- Quarter Ending June 2010: 71.30% of profits

- Quarter Ending June 2011: 75.10% of profits

Observation:

- Maize Processing division has been consistently increasing its share in the profits of GAEL.

- On a Q and Q basis maize profits decreased from 27.31Cr (March 2011) to 20.21Cr (June 2011) but this is part of the business seasonality which depends on harvesting.

An important thing worth repeating from my old Blog is the Client List for GAEL 

India Client List: -ITC Limited, Amul Dairy, Heinz India,  Britannia Industries,  Dabur India,  Hindustan Lever ltd,  Parle Products,  Vadilal Industries,  Priya Gold Biscuits,  Colgate Palmolive India Ltd,  Paras Pharmaceuticals,  Goodrick Group of Companies,  Biocon Ltd,  British Biologicals,  P&G Pharmaceuticals,  Choice Laboratories,  Balsara Home Products,  JP Laboratories,  Agiomed Ltd,  Manisha Pharma Plast,  Goran Pharmaceuticals,  IPCO Industries,  Anchor Health and Beauty

Global Client List: Ellora Agro industries, Grand mills for flour and feeds, Tata Africa holdings, Katakit, Strategic foods international Co LLC, Modern Co for food products, Refined food company, National Biscuit and confectionaries co, English Biscuit manufacturers pvt ltd, Carton products ltd, Kuwait Biscuit and food manufacturers co,Omani packaging company,San Miguel foods incorporated,National company for sponge and plastics, Kuwait flour mills and bakeries co,IFFCO, MS unipex dairy products co ltd, AB Mauri lanka pvt ltd, Ceylon biscuits limited, Fooz factory for biscuits, Nizwa food industries llc, Mufindi paper mills limited, Myanma pharmaceutical industries

For the year ending March 2011 GAEL had 

- Total Sales: 1,949cr

- Export Sales: 547cr

exports is 28% of sales and 72% of GAEL's sales of 1,949Cr is domestic demand related. 

India with the largest youth population of the world and demand is something we can see by just stepping out  of the house into a shopping mall during weekends. Products like toothpaste and shaving cream consist of sorbitol a Maize Derivative supplied by GAEL to Colgate, HUL, Dabur, Balsara and Choice Laboratory.  GAEL provides inputs for everyday use products like biscuits, IceCreams, cakes, snacks, soups, ketchup and cigarettes

Conclusion: GAEL's June Quarter has been consistent.. there are signs of Interest rate and input cost pressures visible in the results. GAEL's client list includes the leaders of Indian Consumer goods industry like ITC, HUL, Colgate, Britannia, Parle, Dabur, Amul, Vadilal, Heinz, Priya Gold also the fact that only 28% of earnings are export related really makes "Exports" in the company name misleading. 

GAEL is committed to increase its capacity of Maize Derivative business, we will see higher profit margins going forward. GAEL is right now priced like a low margin commodity player .. with increased visibility (due to higher profit margins) the stock should see a re-rating.

here is a link to an old product video which is a must see. (link)
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Pitti Laminations: Time to dip in.

Pitti Laminations:

CMP: 40.65

Market Cap: 38.29Cr

Sales TTM (Twelve Trailing Months): 308.71Cr

PBDIT TTM: 37.3Cr

Net Profit TTM: 11.29Cr

Total Debt 95.69Cr

Pitti Laminations has kept its promise and done well. Pitti Laminations in year ending March 2011 Reported Net Profit of: 8.48Cr (March 2010 Net Profit: 29Lakhs) 

We had predicted that exceptional(one time) expenses of 5.6Cr (related to GE account) in year ending March 2010 was the real reason for the drop in profits. This conclusion was drawn based on the fact that PBDIT Margins had infact improved in March 2010 as compared to March 2009.(Link to old post)

"Pitti is already on its way to recovery.. It has expanded its capacity and the value added products are improving its operating margins. Right now the one time exceptional expenses related to GE is distorting the excellent operating margin improvement."

The surprising part is the stock has not responded to the rise in profitability. The TTM (Twelve Trailing Months) PBDIT is 37.30Cr while current market cap is just: 38.29Cr)  Digging a little deeper we see that the promoters are planning for:

- Preferential allotment of Equity increasing their shareholding to 60% (from 42.84% - AR-2011)

- Equity of Pitti Laminations will increase from 9.44Cr to 13.50Cr thats a 43% increase in Equity.

- A 20% Open Offer of Equity from Public is also proposed after the Preferential allotment, this would theoretically increase promoter shareholding to 80%

So my belief is that the current stock price is kept low to ensure that the preferential allotment happens at a low price to the promoters. Most likely Pitti Lamination stock price will rise after preferential allotment (due to good results ) and the 20% additional open offer will not be successful (as stock price will be quoting at a price higher than the buyback rate.)

In addition to this there is some interesting data in the Annual Reports:

These extracts are from Annual report from year 2009 and 2010
In 2009 report the 2010 tentative earnings has been stated as 5Cr net profit and a decline in topline.
In March 2010 company reported a decline in topline and profit of 0.29Cr (The 5Cr exceptional expense related to GE .. otherwise the company would have reported around 5Cr net profit as predicted in Annual Report of 2009)

In 2010 Annual report
March 2011 net profit has been stated as 5Cr with topline of 227Cr
March 2012 net profit has been stated as 8.34Cr with topline of 264Cr

Now if we see March 2011 actual results Profit: 8.48Cr Topline: 255.64Cr
So somehow in the annual reports the Pitti Management is kind of giving away their future expected sales and profit figures..  Lets see what the March 2011 Annual report has to say.

The company management has predicted a 100% increase in net profits for 2012 (19Cr) and 200% increase in profits in 2013 (26.15Cr)

1. Company has increased its production capacity(10,000MT to 25,000MT)
2. They have hired Sanjay Srivastava from GE in their company.

Conclusion: Company is a well managed entity with a respectable client list. Promoters have expanded capacity and are now going to benefit from increased capacity utilization.  Considering the better earning prospects management is increasing their holding in the company from 42.8% to 60%. They are also planning for an "Open Offer" to the public after the preferential issue which could increase holding to 80%. The company management in the annual reports has been providing forward looking earnings numbers which have been true in the past and if true for the future ..its a great opportunity to Buy. I would say Pitti Laminations is a good buy as the Stock price are intentionally depressed (so that the preferential equity issue can be done at a lower price to the management) Giving individual investors a great chance to buy at prices where the promoters are willing to invest. Pls download the Annual Reports as they might not be available in the future.


PN: These are my personal views and opinion about publicly available information. Please do your own deep dive before investing


Annual Report 2011
Annual Report 2010
Annual Report 2009
Pitti Laminations Blog Archives

Aro Granite: Value Buy

Aro Granite:

CMP: 37

Market Cap: 37.75Cr

Debt: 56.92Cr

Reserves: 94.71Cr

Sales March 2011: 151Cr

PBDIT: 21.65Cr

Net Profit: 9.49Cr

52 Week high/low : 71.9/35

http://www.arotile.com

Aro Granite is an established Export oriented Granite processing firm. Company has also entered the local Indian market. Company has received Special Export Award for the 10th consecutive year from CAPEXIL

Share buyback done by promoters. 8,83,500 shares were bought back and extinguished in year 2010 

Only 5794 shareholders. Promoters own 40.95% HNI (High Networth Investors ) own 28.89% shares. 

Company has been paying dividends for past 12 yrs. stock is close to 52 week lows.

There is 10% of shares pledged by the promoters which could indicate there is liquidity issues.

Conclusion: Aro is a well established company in Granite business. The stock is ex dividend and current market conditions gives us an opportunity to enter at a discount.

Poona Dal & Oil Industries or Suryaoday Agro Industries

Poona Dal & Oil Industries 

a.k.a (also known as) Suryaoday Agro Industries.

CMP: 21.10

Market Cap: 12.04Cr

Sales TTM: 296.64Cr

PBDIT: 5.8Cr

Tax: 1.26Cr

Net Profit: 2.62Cr

Cash Flow from Operation: 2.72Cr (5 yrs Avg 2010-2006) (2yrs avg 9.87Cr)

Debt: 9.75Cr

Poona Dal & Oil Industries is an 18 yrs old Agro Processing Firm located in Pune, Maharashtra. It has 3 Processing plants located in Khed, Shirur, Daund Districts. Not much to write about but promoters hold 70% equity. Company has been paying dividends consistently for 8 yrs. Though a small company by any measure .. the secret is that the company has been managing its finances very well. 

Conclusion: At 12Cr market cap and 9.87Cr Operating cash flows (2 yrs avg)4Cr of cash in hand..  A consistent Dividend payout for past 8 yrs of 90 paisa ( 4.2% return at current market price of 21.1) This stock is a great  value buy for the long term investor. Only 4400 shareholders. An Easy double..

This is a great Value Buy. Pls note promoter have unlisted subsidiaries in the same line of business however due to high promoter holding this should not be a concern.

Gujarat Ambuja Exports: Ready Steady Go!!

I was just looking at the charts of GAEL. This is a 10 yrs chart and here is what I see.

1. in 2003 Split adjusted GAEL was quoting at 1.8-5 per share. Right now the stock is quoting at Rs 23.5 which would mean GAEL on a 8 yrs period has multiplied wealth 13.05 to 4.7  times ie a return of 1305% (if invested at Rs 1.8) or a more modest 470% return (if invested at Rs 5 per share).. Anyway we look at it GAEL has given us great returns if we stick with the company on a long term basis.

2. GAEL Stock has been technically forming a higher bottom and there is a strong support at 22.35 level.

3. The stock has consolidated long term and will be a strong buy if it crosses 30 we will have some resistance at 40 and then its all open blue skies. The sky is the limit as they say.

Conclusion:
I have never really looked at the technical charts but come to think of it 2012 looks all set to be an exceptional year for GAEL technically and with the new Maize Derivatives plant it all looks like the stars are getting aligned. Also long term the company has delivered. We know GAEL is a consistent dividend paying company with conservative management with eyes set at "Maize Derivatives" business as the money spinner.

Future Definition of Wealth & Peak Oil

Mar 15,2013: Perfect Storm: Decaying Growth Dynamics 
Dec 17,2012: Pyramid Scheme/Peak Prosperity
Oct 8,2012: Peak Oil: German Army Report 
July 24,2012: Inflation & Growth: Hindu rate of Growth
April 8,2012: Fall of Central Governance..Hello Self Governance
Jan 25,2012: RBI Recommends Diesel Price Deregulation
Dec 21,2011: Rise of the US Dollar
Nov 28,2011: The Energy and Resource Institute (TERI): SMART GRID 
Nov 19,2011: Reliance Industries: Shale Gas Find 41.6Trillion Cubic Feet in US
Nov 11,2011: Aviation Fuel Cheaper than Petrol
Nov 9,2011: Reinventing Mobility: Vision 2020
Nov 8,2011: Energy Equation is changing fast
Nov 5,2011: Shale Gas: Sweet Spot for growth
Nov 3,2011: Bio-Gas Plant for home using food waste
Sept 23,2011: 15 Trillion Dollar Pump
Sept 13,2011: Sell Gold: Cost of Credit Vs Creation of Credit
August 31,2011: 10 largest oil fields in the world
Aug 15,2011: Indian Railways to opt for LNG
Feb 09,2011: Peak oil is here

August 7,2010: Future Definition of Wealth
Jun 19,2010: Peak Oil: Hydrodrive: Add 25% water to diesel with no performance loss, Biofuels with Positive coefficient of performance

Indian Railway to opt for LNG on large scale.

The Indian Railways is one of the largest railway networks in the world. News out is that Indian railways wants to opt for LNG on large scale (I dont see how they will start using LNG?) to reduce green house gas emission and ensure major operational savings.The govt has also committed itself to Diesel Price decontrol.

(Link to article)

Here is a chart of Petroleum/Crude Oil Production in US.

American Geophysicist M.K.Hubbert predicted in 1956 that american oil production would peak in 1965-1970. 

As can be seen from the charts .. he was right.

-All the new oil production/extraction technologies (available to US) till date have resulted in decrease in production of oil.

-The largest consumers of Oil in US is "Transportation" Industry. In India ..there has been a rise in the production and use of automobiles for personal use.

- Crude Oil Refiner Acquisition cost has moved up steadily which means profit margins are under pressure. (Now we know why Reliance Industries is dropping like a Rock and will continue to do so in the future..)

Conclusions: We live in Interesting times and the next 10-20 years are going to be more interesting. 

- The people in power are aware of "Peak oil" but do not want a panic like situation and are using terms like "Carbon Foot-Print", sustainable development, Renewable Energy

- The Markets are trying to manage the volatility associated with transfer of assets from "Petroleum Dependent" to "Petroleum Independent"

- Public transport system .. govt is making every effort to build climate controlled (AC Buses, Metro Rail, Pvt Taxis) public transportation system palatable to all . 

- Piped Gas though has very high initial setup cost is being pushed to each and every household.

- The value of Gold and other precious metals are rising because of this uncertainty(asset price volatility) as Gold has traditionally been a store of Value.  One must remember that its a store of Value not a medium of economic activity. Infact Gold cannot be used even as currency as most of the gold cannot be valued (purity/weight/coinage)

- A large population of the world is engaged in economic activities which are not "necessary/basic requirements" with rising fuel prices the "economic value addition of some sectors will diminish"  while others will gain prominence.

- With rising cost of petroleum .. quality of life will definitely suffer. 

- Future has always been progressive. An Individual in today's world is enjoying the comforts which even a king could not afford in olden days. But it is important to be aware of changes in circumstances. Just as the "Baby Boomers" are set to retire in US in 2011 their main assets House and Mutual fund/Stock Investments have collapsed in Value.

Hester Biosciences: Value Buy

Hester Biosciences: 

CMP: 114.95

Market Cap: 59.67Cr

Sales March 2011: 41.97Cr

PBDIT March 2011: 18.06Cr

Net Profit: 7.6Cr

Hester Biosciences is the largest single location plant for manufacturing Poultry Vaccines in India. It is expanding capacity and entering into livestock and Pet vaccines. It has expanded capacity by 400% and entering into Livestock vaccines. 

Small shareholder base and low PE. Stock though fairly priced is Cheap at current prices due to high value products being manufactured. Venky's promoter also have poultry vaccine manufacturing but it is in pvt company and not  part of listed Venky's  

Good long term buy.

Company Website: http://www.hesterbiosciences.co.in

Annual Report March 2011: (Link)