KRBL Ltd - Strong Fundamentals

VaibhavPRO

Well-Known Member
#1
I bought KRBL Ltd today @ Rs 23.5

I have studied its fundamentals and they are very strong. I feel it is very good buy for long term. wanted to share this wonderful stock.

If sm1 disagree wid me he is most welcome to share his viewpoint.
 
#2
Interesting stock,

I havent done a complete analysis on it yet, but here is my 2 cents from a long distance view.

It is an exporter of Basmati Rice, so it becomes an inverse inflation play. If the rains are bad this year, it is a stock that should not do well. If the rains are good, then it should succeed quite handsomely.
The reason it is an inverse play is simple, its raw material is rice. If the price of rice goes up, (very water sensitive) then its margins are going to come down.
It seems quite liquid, however it has a tendency to rise is bursts not necessarily on a breakout.
It seems to respect the 50 day EMA. If you view it from that point, might have been a better buy if it falls down to the 200 day MA near 21 or maybe even 19.5 (decent support level). I say this because it has just risen to near the 50 day EMA after a fall. It may be a dead cat bounce which will take it down to the 200 day MA. (where it has bounced off in the past).

Overall seems an interesting stock. No real idea of the company, will have to do a greater bit of research on it. Thats just a very quick view that i got in about 5 minutes.
 
#3
Actually, i relooked at the charts.
I dont think this is a dead cat bounce. It seems to have taken up at a support level that was the previous high.
So, :thumb: best of luck.

On fundamentals, take a look at its last 4 quarters. You can see how its margins have dropped in the period that food inflation was rising. Also there seems to be a seasonality to its margins. (maybe it coincides with the rice growing season? Can someone who has some experience with the agricultural cycles in rice explain this?)
 
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#6
I bought KRBL Ltd today @ Rs 23.5

I have studied its fundamentals and they are very strong. I feel it is very good buy for long term. wanted to share this wonderful stock.

If sm1 disagree wid me he is most welcome to share his viewpoint.
Sir ji .. Can you share about your analysis .. will be helpful to us
 

VaibhavPRO

Well-Known Member
#7
Hi DrSatish

First of all i choose a sector.. AGRO sector seemd really good at that point of time(july 2010) becoz of following reason
1. Monsoon were predicted to be above normal.
2. Read an article about a weather phenomena named 'EL NINO'. a research was made by a few scientist dont remember now of which country. The research stated that south and southeast asia will have heavy rainfall for next 3 years.. you can search on google.
3. Also read transcript of fund managers talking about future of agriculture sector and how govt year on year is trying to support agriculture sectors by giving subsidies etc

Then after this i studied fundamentals of most of agro stocks like REIagro,krbl , coromandel International,GSFC etc

I look at lots of things while choosing a script to invest in but following 5 are most imp for me.

1. PE(price earning) Ratio- i compare stocks PE to its peers
2. P/BV(price/book value) Ratio - again comparing with peers
3. operating margins
4. Its daily weekly chart- i mostly like shares which show smooth run up , shares like PFC. also i decide upon my entry points using charts
5. companies website there future plans, there products etc. i like to make a judgement whether they will be able to sustain in the long run

If i find some unsual things in above things i really like to find the reasons for it by searching on the internet and annual reports

now at that time the stock was at 23.5 trading at 4-5 PE while peers trading in range of 7-8 and also KRBL i saw was biggest rice exporter in the world.
p/bv was almost 1 ( shows grossly undervaluation)
margins were good
stock's chart was showing strong uptrend
Its products were among best in international market.

In july - august i bought lots of agro shares which i m still holding
I bought
KRBL @ 23.5 and again @ 32
REI Agro @ 21.4
Coromadel international @ 523
GSFC @ Rs. 236 (grossly undervalue i felt)

In case of KRBL i got really lucky bcoz of news of pakistan floods and therefore rise in price of basmati rice in international market.

one more thing which is most imp is taking a view on the market.. i feel market is in a strong uptrend.. market will again pick up pace once the result season is over that is around Jan-feb.. Will hold on to all the above 4 stocks till DEC 2012 as i feel india will have good monsoon in next 2 season also..
 

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