Active TopicsActive Topics  Display List of Forum MembersMemberlist  CalendarCalendar  Search The ForumSearch  HelpHelp
  RegisterRegister  LoginLogin

Stock Synopsis
 The Equity Desk Forum :Investment Ideas - Creating winning portfolios! :Stock Synopsis
Message Icon Topic: Riddhi Siddhi Gluco Biols Ltd.(Topic Closed Topic Closed) Post Reply Post New Topic
<< Prev Page  of 3
Author Message
karn
Senior Member
Senior Member
Avatar

Joined: 05/Apr/2010
Online Status: Offline
Posts: 798
bullet Posted: 16/Jul/2010 at 12:23pm
Mahesh ji,
Congratulation for posting exhaustive analysis. I have a question.
As entry barriers in this industries are very low, what do you think is USP of Riddhi Siddhi?

In addition I would like to share some info with Teddies who are interested in this sector/industry.

State-wise List of Starch Industries in India:

Gujarat
Anil Starch Products Ltd, Ahmedabad
Maize Products Ltd, Ahmedabad
Gujarat Ambuja Starch Products Ltd, Ahmedabad
Gulshan Polyols Ltd, Jhagadia Industrial Estate, Bharuch

Karnataka
Riddhi Siddhi Glucobiols Ltd, Gokak, Belgaum District

Maharashtra
Sahyadri Starch & Industries Ltd, MIDC, Miraj
Universal Starch Products Ltd, Dhule
Yaswant Glucose Ltd, Sangli
Kissan Starch Ltd, Dhule
Madhya Pradesh
Rajaram Corn Products Ltd
Tirupathi Starch Products Ltd, Indore

Tamilnadu
Santhosh Maize & Industries Ltd, Salem
Varalaxmi Starch Ltd, Salem
Kamala Sugars Ltd, Coimbatore

Andhra Pradesh
Gayathri Starch Ltd, Hyderabad
Vensa Biotek Ltd, Samalkot

Punjab
Sukhjit Starch Products Ltd, Phagwara

Haryana
Bharat Starch Products Ltd, Haryana

Major End-Users of Starch and Starch based Products

Hindustan Lever Ltd, Colgate Palmolive Ltd, Lotte India Ltd, Perfetti Vanmelle India Ltd, Nutriene Confectionary Ltd, ITC Limited, Wrigley India Ltd, Cadbury India Ltd, Aviat Chemicals Ltd, Hindustan Latex Ltd, Glaxo Smithkline Ltd, Merck India Ltd, Kamani Oil Mills, Wardex Laboratories Ltd, Griffon Labs Ltd, Emcure Pharma Ltd, Britannia India Ltd, Godrej Agrovet Ltd, Modern Food Industries Ltd, Nestle India Ltd, Heinz India Ltd, Campco Ltd, Bombay Dyeing Ltd, Kissan Foods Ltd, Marico Oil Industries
“Invert, always invert.”
IP IP Logged
satsandh
Newbie
Newbie


Joined: 23/Jan/2007
Location: United Arab Emirates
Online Status: Offline
Posts: 33
bullet Posted: 16/Jul/2010 at 12:58pm

looking further for reports on RSGBL I picked up an old report when the price was 186/- (CMP 277.95) from outlookprofit which had published an article about 25 stocks to buy in the next market crash i whih RSGBL was one of the stocks.

One of the concerns mentioned in the report was exactly what Hitesh had queried an that is the tendency of rising raw material prices biting into ints net margins as corn prices were ruling firm.
 
RSGBL vantage points were :
a) its solid relationships with farmers - ensuring steady supplies even in a situation when crops are low or weak.
b) Association with Roquette Freres key collaborator  (also stake holder of 14.93% as Mahesh had reported) and third largest starch processor in the world with whose help new value added starch varieties could be launched where margins are higher.
Corn pices plays a vital role ( constitutes 60% of RM costs) and reasonable rainfall in the corn growing states of Karnataka (main source) and Maharashtra should see a good harvest which would ensure steady prices. Even if topline increases, in the event of higher corn prices (that occured in Q1FY10) which could not be fully passed on, net margins could take a hit.
The other concern is the foreign currency loan (rupee loan converted at contracted price of Rs 44/-) and the mark to market losses (term used to denote valuation of foreign currency denominated liabilities at the current market price instead of the original cost and booking the losses in that year )incurred has been kept in a foreign currency translation difference account to be amortised by 2011. The amount was 10 crores in 2008-09 and how much of this has been amortised in 2009-10 and what was the m-t-m losses if any for 2009-10 I am not sure. This has to be checked as if the amount is still lying in the books unamortised, then the entire cost will hit 2010-11 books as Accounting Standards 11 has given 2011 as the cut off to comply with the financial reporting guidelines.
If the Indian Rupee gains (currently Rs. 46.77) as Mr Ganpath Chowdhary maintains then the damage will be limited only to the year in question that is 2008-09.
Currently trading at CMP 277.95, it seems to be having difficulty moving above 285.- where it is facing resistance. 
 
 
 
 
 
IP IP Logged
maheshi
Newbie
Newbie


Joined: 23/Jun/2010
Location: India
Online Status: Offline
Posts: 21
bullet Posted: 17/Jul/2010 at 3:27pm
Low margins were due to higher interest outgo and significant rise in maize prices. Maize prices are expected to see stable price scenario in near future as also interest situation will also be favourable going forward because of significant cash infusion in the company and healthy internal cash generation as in FY11 company is expecting EBIDTA between 160-180 cr.
 
On clientle comment you are wrong as company is increasing its client list every passing year which is evident from healthy growth in topline.
 
Rgds.
Mahesh
 
 
Originally posted by riser3

Riddhi siddhi is a good stock and had been the only multibagger for me I have bought it around 70 rupees(discovered before the media attention for the stock) and hold it till recently and sold it @ 200/-

Sorry to post the negatives but Riddhi siddhi though in excellent business has always the pressure on Margins because of almost same clientele and lower bargaining capacity the stock is already a multibagger for investors like me and hope it will raise much more
IP IP Logged
maheshi
Newbie
Newbie


Joined: 23/Jun/2010
Location: India
Online Status: Offline
Posts: 21
bullet Posted: 17/Jul/2010 at 3:30pm
 Respected Mr. Basantji,

 

Why to ask someone else than to the person himself. I will tell you where else I have posted these reports and the reasons why I have posted them and if you feel I am suspicious then just tell me and I will never post on TED again. The person who has wrong in his heart has fear and guilt in his deeds.

 

Now, to answer your query, I have posted my reports on ********* ********************

 

Now, my reason for posting to various forums. When I started investing I used to visit various forums which I come across by somebody's reference or by word of mouth or via search engine, etc. From such forums I used to get some stock idea and then do detail research on it. My habit is to do detail research and gather as much information possible on a company before investing in it. In the process I felt that the research which I am doing has to benefit all rather than only myself and so I started making detailed reports which even a layman can understand rgdg. the company which I invest in, to first check myself whether I am on right track or not and if I feel that I am right then to publish it for the benefit of all who don't have skills and resources to procure such analysis. Another reason of posting such report on various forums is that there might be something rgdg. a company which might have missed my attention can be brought to my attention via replies to my post. Also, reason for posting to multiple forums is that I can cover as much investors and analysts as possible so that I can get as much diverse views as possible so that I can reconfirm myself whether I am right or not. While doing so all the readers of my reports benefit from the detailed analysis I do and vast information I provide rgdg. the company and my main purpose of providing such detailed analysis and vast information is that  the reader can understand the company from each and every angle so that any corner doesn't remain untouched.

 

Now, Mr. Stockboy's comment rgdg. the reports published on behest of someone and the proof of such assumption is my mentioning of equity dilution rgdg. both the companies and that also specifically rgdg. Simran Farms with such tiny equity and minimal debt, Mr. Stockboy should very well understand that if a company has to grow, it needs to invest money and once a reasonable scale is achieved by a company (as is achieved by Simran Farms), to grow from such scale it requires a lot of money as otherwise it will sink into its own growth. Also, Mr. Stockboy should understand the art of financial projections wherein you need to incorporate every logical possiblity whether it actualy happens or not. Equity dilution is a logical possibility in case of both Simran and Riddhi because Simran needs to grow from a scale which it has not seen in its history while Riddhi needs to become an international player to reckon with in cornstarch industry as also become asia's largest cornstarch player in addition to retaining its industry leadership position in India. Hence, my these many years of experience of analysing various companies and my capability of anticipating logical moves of the respective management compels me to arrive at financial projections only after incorporating logical possibility of equity dilution. If this fact, written in good faith for benefit of all, is interpreted in such a way to suspect my integrity then I am sorry to say but it is as if a guy who does not understand a subject atall is giving lecture regarding that subject and also arriving at his own conclusions regarding an ununderstood subject.

 

With due respect to you Mr. basantji, altrhough I agree to the fact that TED is a great forum and is one of the best forums I have visited so far and you guys are doing great work here, but still, I must mention here one thing that you started your reply to Mr. Stockboy thanking him for his comments and then demanding the links and all but I wonder whether you have put your thought on the detailed analysis I have made and the pain and effort I must have spent to make such a report and publish it to forums for the benefit of all. Anyway still I can understand your concern and your legitimate vision of not allowing TED to get misused by someone but still you should have avoided Thanking him for his allegations-filled comment as it implies that you are agreeing to him. You should have demanded explanation which without you demanding I am providing not because I want to continue posting on TED but because I am strictly against false allegations. This is the reason why I am posting such detailed reply.

 

Also one important thing needs to be mentioned here. If you go through my various replies, in one reply I have clearly mentioned that we need to revisit Simran Farms after declaration of their Q1 numbers and also I have mentioned that Simran is a high-risk-high-gain stock while Riddhi is a low-risk-high-gain stock. Although in my portfolio both the companies occupy almost same percentage but still in my reply I posted this fact that one company is more riskier than other because Riddhi is an industry-leader and probability of losing money in the long run in an industry leader is remote than that in an industry player. If I would have had vested interest or was doing on behest of someone would I have commented like this way ?

 

To conclude, I have published my reports with all genuinity and someone deserves the right to counter my argument of the report but no one deserves the right to question my integrity. If publishing detailed analysis regarding a company and providing as much information as possible regarding a company is my fault then I am proud on my such deed.

 

Awaiting reply from you Mr. Basantji.

 

Rgds.

Mahesh

 
Originally posted by Stockboy

I smell a rat here. Such detailed reports are made at the behest of someone and published for some reasons. In both the cases of Riddhi as well as Simran Farms, the author mentions equity dilution. Look at at simran farms, with negligible debt, why should it go for equity
raising?


Edited by basant - 17/Jul/2010 at 4:13pm
IP IP Logged
maheshi
Newbie
Newbie


Joined: 23/Jun/2010
Location: India
Online Status: Offline
Posts: 21
bullet Posted: 17/Jul/2010 at 3:42pm
Thanks Mr. Karn for your appreciation.
 
Now, rgdg. entry barriers, entry barriers are not low in cornstarch industry. One needs to invest a lot of money to build plants like Riddhi has in Gokak, Viramgam and Pantnagar. To add, industry is very small in India with just 2000 odd cr. size. Hence, a company entering the industry needs to enter with strong R&D capability to find more uses of cornstarch and customise and commercialise products in such a way that it can increase industry size and give place for it (company) in the marketspace. Also, plants need to be situated in proximity to raw material areas to save on costs and ensure avilability.
 
USP of Riddhi are discussed in detail in my report as well as my other replies. To revisit in brief,
 
first and foremost its management,
 
second its world-class plants
 
third its association with Roquette,
 
fourth its plants location and its raw material procurement policies of avoiding middlemen by directly dealing with farmers making upfront payment, etc.
 
fifth its R&D via which it continuously innovates products and commercialises more and more products every year,
 
sixth its industry leadership status with no formidable competition insight
 
Rgds.
Mahesh
 
Originally posted by karn

Mahesh ji,
Congratulation for posting exhaustive analysis. I have a question.
As entry barriers in this industries are very low, what do you think is USP of Riddhi Siddhi?

In addition I would like to share some info with Teddies who are interested in this sector/industry.

State-wise List of Starch Industries in India:

Gujarat
Anil Starch Products Ltd, Ahmedabad
Maize Products Ltd, Ahmedabad
Gujarat Ambuja Starch Products Ltd, Ahmedabad
Gulshan Polyols Ltd, Jhagadia Industrial Estate, Bharuch

Karnataka
Riddhi Siddhi Glucobiols Ltd, Gokak, Belgaum District

Maharashtra
Sahyadri Starch & Industries Ltd, MIDC, Miraj
Universal Starch Products Ltd, Dhule
Yaswant Glucose Ltd, Sangli
Kissan Starch Ltd, Dhule
Madhya Pradesh
Rajaram Corn Products Ltd
Tirupathi Starch Products Ltd, Indore

Tamilnadu
Santhosh Maize & Industries Ltd, Salem
Varalaxmi Starch Ltd, Salem
Kamala Sugars Ltd, Coimbatore

Andhra Pradesh
Gayathri Starch Ltd, Hyderabad
Vensa Biotek Ltd, Samalkot

Punjab
Sukhjit Starch Products Ltd, Phagwara

Haryana
Bharat Starch Products Ltd, Haryana

Major End-Users of Starch and Starch based Products

Hindustan Lever Ltd, Colgate Palmolive Ltd, Lotte India Ltd, Perfetti Vanmelle India Ltd, Nutriene Confectionary Ltd, ITC Limited, Wrigley India Ltd, Cadbury India Ltd, Aviat Chemicals Ltd, Hindustan Latex Ltd, Glaxo Smithkline Ltd, Merck India Ltd, Kamani Oil Mills, Wardex Laboratories Ltd, Griffon Labs Ltd, Emcure Pharma Ltd, Britannia India Ltd, Godrej Agrovet Ltd, Modern Food Industries Ltd, Nestle India Ltd, Heinz India Ltd, Campco Ltd, Bombay Dyeing Ltd, Kissan Foods Ltd, Marico Oil Industries
IP IP Logged
basant
Admin Group
Admin Group
Avatar

Joined: 01/Jan/2006
Location: India
Online Status: Offline
Posts: 18403
bullet Posted: 17/Jul/2010 at 3:49pm
I do not want any material on TED that has been posted elsewhere. Hence I have no option but to close the topic.

I will not hesitate to close all such threads that are in my opinion too iliquid to be fit for discussion in terms of a) market cap and b) volumes traded.



Edited by basant - 17/Jul/2010 at 4:10pm
'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
IP IP Logged
<< Prev Page  of 3
Post Reply Post New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum



This page was generated in 0.064 seconds.
Bookmark this Page