Page Industries–90 PE is not expensive–Cartica Capital

An interesting take from Cartica Capital which is the 2nd largest public shareholder in the stock after Nalanda.

Video Link –

Check 2.40 to 4.10 . The overall interview is also interesting.

You might want to read up on Modigliani Miller Model for valuation

Indag Rubber–Buys a Group Company – Electric Vehicles Ancillary–Sun Mobility–Diversification or Diworsification?

Intimation under Regulation 30 about investment upto Rs.14.50 crores (USD 2.1 million) by way of acquisition of 21,00,000 equity shares of USD 1 each of SUN Mobility Investor Ltd.(Jersey) 

Khemka group has indirect control and ownership.

Investment is being done at book value of USD 1 per share.

Although the total investment is only 14.5 cr as of now. Will this be a good diversification or diworsification ?

Disclosure – No Holdings. Not a recommendation.

Banks Strategy of Mutual Fund Distribution–Highly Biased ?

8 out of top 10 Mutual Fund Distributors by Commission are Banks. With more than 3200 cr of commission income in between them.

Strategy is Highly Biased ?

Bank Selling Strategy

State Bank of India makes 99% of its mutual fund commission income from distributing schemes of SBI Mutual Fund.

SBI seems to have picked up distributing mutual funds only in last 3 years.

In last 1 year commission income has gone up from 178.7 cr to 557.9 cr !!!

Year Commission Income 
2017-18 557.9
2016-17 178.7
2015-16 62.12
2014-15 69.38
2013-14 28.95
2012-13 36.43
2011-12 30.76
2010-11 37.64

ICICI Bank gets 73% of the mutual fund commission income from distributing ICICI Prudential Mutual Fund.

But ICICI Securities only gets 18.5% of the commission income by distribution of ICICI Pru MF. Is it because one cannot buy Regular Plans through ICICI Direct but account holders have a choice to select their own preferred AMC ?

ICICI Securities Limited 316.53 58.45 18.5

Source Links

AMFI commission Disclosures –

Websites of respective Mutual Funds

More than 800 Mutual Fund Distributors with Payouts of more than 1 cr in 2018

In the last few years Mutual Fund Distribution has picked up in a strong way.

The number of mutual fund distributors with a pay-out of 1 cr plus has almost gone up 3.5 times since 2011-2012.

Mutual Fund Commission

The top 20 distributors by commission paid

Top 20 MF Distributors

NJ IndiaInvest continues to be on top.

8 out of the top 10 distributors are Banks !!

Out of all the banks SBI has increased commission income to 557.9 cr from 178.7 cr last year.

Source Links

AMFI commission Disclosures –

Websites of Mutual Funds

Insider Trading Disclosures – Chambal,Man Infra, Chembond Chemicals etc

Some of the interesting Insider Trading Disclosures from 1st Jan to 31st March 2018.

Insider Trading Dislcosures Analyse India 

We keep looking at Insider Trading/Bulk Deals for looking at interesting action and not necessarily buy or sell because of Insider Trading.

Although Insiders buying in a bear market has helped us pick interesting names a few years back.

Disclosure – No views on any of the stocks above and no recommendation. Please do your own research.


Is Sun Pharma Checking In Unichem Laboratories ?


Unichem Labs Share Holding Pattern

Share holder Name Dec-17 Mar-18
  No of shares % holding No of shares % holding
Alrox Investment & Finance 1597763 1.76% 997437 1.42%
Airborne investment & Finance 1149452 1.26% 717568 1.02%
Family Investment Pvt Ltd 1438522 1.58% 898026 1.28%


Sun Pharma Share Holding Pattern

Share holder Name Mar-18
  No of shares % holding
Viditi Investment Pvt Ltd 200846362 8.37%
Family Investment Pvt Ltd 182437880 7.60%
Virtuous Finance Pvt Ltd 96851821 4.04%
Virtuous Share Investment Pvt Ltd 83751259 3.49%

Whats common between this entities : –

  1. The Companies Address of Alrox, Airborne & Family investment is same as Taro Pharmaceuticals India Pvt Ltd.
  2. The Director of Alrox Investment, Airborne Investment is the same of Virtuous Finance, Virtuous Share — Mr Dineshkumar Ramniklal Desai
  3. The Director of Family Investment Pvt Ltd & Viditi Investment is the same Mr. Milind Vijay Goradia

Midcap Funds Underperformed in 2017 because of Vakrangee Limited ?


“Mid cap category was the worst hit, with 62 per cent schemes underperforming. We had a total of 34 mid cap schemes in our list.”

From this Nov 2017 article.

A lot of Midcap Mutual Funds underperformed the Benchmark – Nifty Midcap 100 in 2017.

One of the reasons was the huge move in Vakrangee Limited and a little bit of a outperformance move in Rajesh Exports. Both these companies have almost zero Mutual Fund Holdings . ( good to see such a boycott.)

But the index calculation does not care for valuations or any other governance concerns. Its a free float survivorship index. For example RCOM was the 7th Largest weight in Nifty in 2007 peak.

Stock Value – Dec 2016 Weights – Dec 2016 Value – Dec 2017 Weights – Dec 2017 Value – Feb 2018 Weights – Feb 2018 Returns Dec16 to Dec17
Rajesh Exports 462 1.18% 805 1.47% 837 1.52% 74.24%
Vakrangee 137 1.58% 421 3.47% 163 1.34% 207.30%
Nifty Midcap 100 4402   6697   6199   52.14%

Of the 52% return in 2017 almost at 3-4% impact came from Vakrangee !!!

Control Print – Quick Notes from QIP Placement Document

Starting a new series on quick notes from the QIP Placement Document shared by the companies. We find this document to be more detailed in comparison to the Annual Report. The most detailed document is the DRHP but that comes out only for new listings.

This is not a Buy/Sell Recommendation. We may only post on companies we track.

All QIP documents generally updated on this link –

Control Print – QIP Placement Document


· Company is one of India’s leading Coding and Marking solutions provider for printing variable information such as batch numbers, manufacturing and expiry dates, maximum retail prices, serial numbers, special markings, logos, company names and barcodes

· Vertically integrated company, involved in the development, research, manufacturing, marketing and commercializing of printing machines, spare parts, consumables (fluids) and associated services

About Industry – Coding & Marking

· Industry growth is closely co-related to packaging industry growth and the manufacturing sector growth as a whole

· Dominated value-wise by 4 players (Videojet Technologies, Domino Printech, Markem-Imaje India and Control Print) with our Company being amongst them

· Consistent growth of 15%+ over the last decade and is estimated to grow at similar rates approximately 10-15% revenue growth in the near future

· North America accounted for the largest market share of approximately 31% of the global market in 2016

· China, Japan, and India are three top countries contributing towards highest market size in the Asia Pacifc region

· Worldwide Coding and Marking market can be segmented on the basis of technology

(1) Continuous Ink Jet Printer (CIJ)

(2) Piezo Ink Jet Printer (PIEZO)

(3) Print and Apply Labelling Products (PALM)

(4) Thermal Ink Jet Printer (TIJ)

(5) Thermal Transfer Overprinting Printer (TTO)

(6) Valve Jet Printer (VIJ)


· Continuous inkjet (CIJ) coding is presently the most preferred technology in the global coding and marking system market due to its ease of installation

· Indian Coding and Marking industry is estimated to be worth 1000 crores.


· Continuous Inkjet Printers (CIJ)

· Drop-on-Demand Valvejet Printers (LCP)

· Thermal Transfer Over-printers (TTO)

· Thermal Drop-on-Demand Inkjet Printers (TIJ)

· Laser Coders

· Thermal Ink Coders

· High Resolution Piezo Drop-on-Demand Inkjet Printers (HR) and

· Related consumables and spares.

CIJ printers have been growing at a stable rate of 7-8% annually. However, increasing adoption of TIJ, TTO, and LCP printers is expected to drive the industry growth higher

Manufacturing Facilities

Two manufacturing plant across India, one at Nalagarh, Himachal Pradesh (37,316 sq ft), and other at Guwahati, Assam (65,000 sq ft) and One Research & development centre at Vasai Maharashtra (4500 sq ft).

Production Process

· Pre-dominantly an assembly process starting from the semi-fnished goods (SFG), followed by the assembly of printers and the testing procedure before dispatch of the printers

· Production of SFGs

· Production of Printers

Ø 1st Stage/Housing Assembly

Ø Final Printer Assembly

· Testing of Printers

Raw Materials

· Electronic & pneumatic components printer assembly and dyes & chemicals for consumable production

Customers and Geography Catered

· We provide our goods and services to a wide range of industries including Personal Care, Food & Beverages, Pharmaceuticals, Construction Materials, Cables, Wires & Pipes, Metals, Automotive & Electronics, Agrochemicals, Chemicals & Petrochemicals amongst others

· Registered office is located at Andheri, Mumbai and branches located at other prominent cities of India such as Delhi, Chandigarh, Kolkata, Jamshedpur, Hyderabad, Chennai, Bengaluru, Colombo (Sri Lanka), Pune and Ahmedabad

· Targeting the markets of Sri Lanka, Nepal and Bangladesh

· Countries to which we export our products are Germany, China, Sri-Lanka, Nepal, and Bangladesh


· One wholly-owned subsidiary – LIBERTY CHEMICALS PVT. LTD.


· 328 sales and service field staff across 13 branch offices in India and Sri Lanka

· The total manpower strength of our Company as of March, 2017 is 665 employees.

· As on March 31, 2017, our sales and marketing team consists of 110 employees

Use of Proceeds

· Primarily for the purpose of capital expenditure for ongoing and future expansion projects, acquisitions, working capital and general corporate purposes

Revenue Breakup

· Income from operations substantially comprises of sale of Printers on outright basis, Printers on Rent and on Cost per Print basis, sale of consumables like Inkjet fluids, Ribbons and Ink-rolls, Annual Maintenance Services

· No Single customer above 5% revenue


Industry Revenue Breakup


Expenses Breakup

· Expenses comprise of operating expenses, employee benefts expenses, fnance cost, depreciation and amortization and other expenses

· Operating expenses constituted for 40.46%, 39.93% and 41.42% of our total revenue for Fiscal 2017, Fiscal 2016 and Fiscal 2015

· Employee benefit expenses constituted for 18.73%, 19.42% and 18.69% of our total revenue for Fiscal 2017, Fiscal 2016 and Fiscal 2015

· Finance costs accounted for 0.72%, 1.21% and 0.92% of our total revenue for Fiscal 2017, 2016 and 2015

· Depreciation and amortization expenses accounted for 2.69%, 2.13% and 1.87% of our total revenue for the Fiscals 2017, 2016 and 2015

· Other expenses (includes rent and repairs / maintenance of office premises) accounted for 14.55%, 13.85% and 14.93% of our total revenue for Fiscals 2017, 2016 and 2015

LT Foods ( Daawat )–Quick Notes from QIP Placement Document

Starting a new series on quick notes from the QIP Placement Document shared by the companies. We find this document to be more detailed in comparison to the Annual Report. The most detailed document is the DRHP but that comes out only for new listings.

This is not a Buy/Sell Recommendation. We may only post on companies we track.

All QIP documents generally updated on this link –

LT Foods ( Daawat )

Company’s History


Company has 11 subsidiaries in India, nine subsidiaries outside India, two joint ventures, and three associates.


We sell our products internationally under various key brands, including “Daawat”, “Royal”, “Devaaya” and “EcoLife”.

Introduced quick cooking brown rice, sauté sauces, ready to heat range of products.

Acquired brands such as “Gold Seal Indus Valley”, “Rozana” and “817 Elephant” in the past to gain presence in new geographies

Products can broadly be divided into the following six categories:

(i) basmati rice;

(ii) value added staples;

(iii) organic products;

(iv) regional rice;

(v) rice based snacks; and

(vi) other products.

In Fiscal 2017, basmati rice, value added staples, organic products and other products represented 77.36%, 1.60%, 7.24% and 5.31% of our total revenue from operations, respectively.

The following table sets out certain information on our product categories and certain of our key brands:


The sale of our premium segment products has grown significantly over the years. In Fiscal 2015, 2016 and 2017, sales of premium segment basmati rice represented 10.19%, 9.47% and 9.78%, respectively, of total sales of rice in such periods

In Fiscal 2015, 2016 and 2017, revenue from our organic segment represented 6.34%%, 7.53% and 7.24%, respectively, of our total revenue for the respective periods.

About Basmati

‘Basmati’ can only be cultivated in India and Pakistan, which makes them the sole suppliers in the world. It is grown only once a year, in the kharif cropping cycle, sown in May-June and harvested in September-November. In India, the major Basmati rice-producing states are Punjab, Haryana and Uttar Pradesh, which together account for over 95% of the country’s total Basmati rice production

India’s Basmati rice production is estimated to be in the range of 5.8 million to 6.0 million tons, out of which around 4.0 million tons is exported, and the balance is consumed domestically

Basmati rice exports from Pakistan have declined steadily in recent years.


A majority of India’s Basmati rice is exported to the Middle East followed by the United States and United Kingdom. Demand from Iran, the second largest export destination for India, has been the most volatile. Iran’s rice consumption is estimated at around 3 million tons per annum, which is met through their domestic rice production of around 2 million tons per annum and the balance through imports.

The European Union (EU) is a key market for the industry, accounting for around 8% of the total Basmati rice exports from India. The following chart represents the trend of exports to the European Union over the past five Fiscal years


The following chart represents the key export markets for India’s Basmati rice industry:


A significant amount of time passes between when we purchase basmati paddy and sell finished basmati rice. During this period of ageing, the price of basmati rice may fluctuate. For example, in Fiscal 2015, 2016 and 2017, the average price of basmati rice we sold was ₹ 74,521 per MT, ₹ 59,891 per MT and ₹ 59,008 per MT, respectively. As such, if the price of basmati rice falls during the time it is held for ageing, we may not be able to recover our investment in the basmati paddy and processing operations, which could adversely affect our financial condition

Agro Exports – Share of Basmati and Non-Basmati

India’s total agro product exports was ₹ 520.69 billion in Fiscal 2017; however, almost 75% of the same was contributed by the sale of rice (both Basmati and non-Basmati) clip_image011

Paddy Procurement

Basmati paddy prices declined in the procurement season of Fiscal 2015 and Fiscal 2016. However, Basmati paddy prices increased by 20% to 25% across varieties in the last procurement season (October – December 2016) on the back of relatively lower production

In Fiscal 2015, 2016 and 2017, we procured 450,739 MT, 398,288 MT and 356,663 MT, respectively, of basmati paddy.

How is Basmati Procured


Processing and Packaging Facilities

We operated five processing and packaging facilities in India. Aggregate rice milling and sorting capacity of 86.90 MT per hour, aggregate rice sorting and grading capacity of 72.00 MT per hour and aggregate rice packaging capacity of 86.30 MT per hour

Operated three packaging facilities in the United States, and a processing and packaging facility in Rotterdam, Europe

Storage Capacity

As of September 30, 2017, our aggregate storage capacity (including open and covered warehousing facilities) for paddy and rice was 637,900 MT.

Brand Ambassadors

Movie actor Amitabh Bachchan and Celebrity chef and Sanjeev Kapoor

Procurement Agents and Distributors

As of September 30, 2017, we had entered into arrangements with 210 procurement agents (who work for us on a commission basis, with commission rates of approximately of 1.00% of the sale price), across 200 mandis established by the various State governments

750 distributors across 29 States in India.

Export Revenues

In Fiscal 2017 and in the six months ended September 30, 2017, we derived 54.10% and 64.64% of our total income from outside India, respectively

In Fiscal 2015, 2016 and 2017, our income outside India was ₹ 12,827.34 million, ₹ 18,876.37 million and ₹ 17,972.85 million, respectively which accounted for 46.15%, 63.35% and 54.10%, respectively, of our total income in these periods

Top ten export customers accounted for 15.55%, 20.10% and 13.53% of our total income in Fiscal 2015, 2016 and 2017, respectively, while our largest export customer accounted for 6.35%, 9.15% and 3.27%, respectively

The following table sets forth our sales of products from the different markets in which we operate and as a percentage of total sales of products in the periods indicated:


Cost of Materials Consumed

Cost of materials consumed constitutes the largest component of our expenses and represented 78.55%, 75.46% and 77.55% of our total expenditure in Fiscal 2015, 2016 and 2017

Changes in prices 2016 vs 2017

The cost of rice consumed (including broken and unpolished rice) increased by 48.65%

Cost of paddy consumed also increased by 7.18%

Cost of packing materials also increased by 27.60%

The following table sets forth certain information relating to our cost of material consumed presented as a percentage of total income:


Product Innovation Centres

Two product innovation centers, one in Gurugram, India and one in California, United States, with a team of research personnel


Inability to timely procure sufficient good quality basmati paddy at reasonable costs

Failure on the part of such agents to procure, in a timely manner, the desired quality and quantity of basmati paddy

Fluctuations in the market price of basmati rice

Reduction in output due to pest attack and disease

Changing climate conditions and weather patterns

JV’s and Tieups

We have also entered into strategic joint ventures with Future Consumer Limited and Kameda Seika for the expansion of our product portfolio with a shareholding of 50.00% in our joint venture with Future Consumer Limited, and a shareholding of 51.00% in our joint venture with Kameda Seika.

Losses of Group Entities


Key Markets in 6MFY18



There are five major organized players in the basmati rice industry in India, namely, KRBL Limited, LT Foods Limited, Kohinoor Foods Limited, Lakshmi Energy & Foods Limited and Chaman Lal Setia Exports Limited.


Basmati rice export realizations are driven by two key factors – paddy prices (input cost) and international demand.

Fiscal 2017 witnessed the third consecutive year of decline in value of Basmati rice exports from India, despite the volumes holding firm, as realizations remained under pressure. However, there has been a rebound in the current fiscal with the first quarter witnessing 32% growth in exports – driven both by increase in realizations (25%) and increase in volumes (7%)

In the past, an increasing trend for these two factors pushed up average realizations from ₹ 48,448 per MT in Fiscal 2011 to ₹ 77,988 per MT in Fiscal 2014. However higher volatility in paddy prices has exerted continuous pressure on average realizations, which have declined further to ₹ 54,011 per MT in Fiscal 2017.

Branded vs Unbranded

The following table sets forth certain information relating to the quantities, amounts and percentage of our total branded and unbranded basmati rice sold for the periods indicated: clip_image023

New EU Regulations pertaining to chemical residues in Basmati clip_image025

Paddy Prices

As per early estimates, paddy sowing in these states has decreased by 10% to 15% in the current fiscal, primarily due to lower rainfall received in these states as demonstrated below


Paddy prices are likely to remain firm in the upcoming procurement season, with an increase of up to 5%. While this should support the Basmati rice prices for the first two quarters of Fiscal 2018 and Fiscal 2019, it can adversely impact the profitability of operators in case demand declines, especially from international customers.


We typically store the basmati paddy in silos. As of September 30, 2017,
we had an aggregate storage capacity of approximately 637,900 MT for paddy and rice, including covered storage capacity of 371,020 MT and open storage capacity of 266,880 MT

Processing and Manufacturing Process clip_image028

Intellectual Property

As of September 30, 2017, we had various trademarks registered under our Group across over 50 countries. We have over 80 registered trademarks in India, including “Daawat”, “Royal”, “EcoLife” and “Devaaya”. We have also filed applications for registration of certain other trademarks that are under various stages of review