BASANT AGRO MULTIBAGGER POTENTIAL STOCK D28M11Y2014

Basant Agro Tech was started as a joint initiative between the "Bhartia group" based in Akola, Maharashtra and Mr. C.L.Jhunjhunwala. Its business activities are mainly focused on fertilizers and seeds. For more info check, http://www.krishisanjivani.com             

The company is managed by the Bhartia family who are well versed and experienced in the field of agriculture with a track record exceeding 2 decades. Their brand name "Krishi Sanjivani" is well accepted by farmers and the company has established a robust distributor network.   

PRESENT DAY NUMBERS      
CMP on Day28 November2014: Rs 8          Market cap: 72 crores         BV: 10        FV: 1      
Revenue FY14: 313 cr (FY13 291 cr)        Net profit: 16 cr (FY12 10 cr)     EPS: 1.83 (FY13: 1.15)
Long term Debt: 50 cr approx (as per FY14 annual report)      

MULTIBAGGER POTENTIAL       
1. The seeds division contributes to approx 30% of the over all revenue and 40% of the net profit. The future scope is immense. 
2. This division is headed by Dr. B.G.Bathkal, ex-Chancellor of PDKV university, and he is a pioneer in this field with several achievements to his credit.  
3. The company has undertaken a major expansion in one of its SSP fertilizer unit to increase the capacity substantially; the result will show in the top line and bottom line over the next few quarters     
4. Agriculture accounts for approx 14% of the nation's GDP  and  11% of its exports   
5. About half of the population of India still relies on agriculture as its principle source of income.   
6  Agriculture is also a source of raw material for a large number of industries.     

IMPORTANT INFO         
1. Steady revenue growth over last 10 years    
REVENUES: FY2005 (46 cr); FY2007 (92 cr); FY2009 (128 cr); FY2011 (168 cr); FY2013 (291 cr)

2. Consistent profits over last 10 years  
NET PROFIT: FY2005 (1.2 cr); FY2007 (3.5 cr); FY2009 (5.4 cr); FY2011 (6.1 cr); FY2013 (10.4 cr)

MY TAKE       
Agriculture will continue to be closely aligned to the progress of India as a country, and economy, for at least the next 2 - 3 decades. If India has to grow and prosper, then utmost importance needs to be given to agriculture. Almost all the state governments and the central government recognize this fact. Good quality seeds and suitable fertilizers are of prime importance to this development and success.    

Basant has a well established, and positioned, fertilizer division and a fast growing seed division. The company is adequately equipped to play an integral part of the India growth story through its contribution towards the agriculture sector. Based on the tremendous future growth potential, the company is deeply undervalued at current levels.    

A robust potential multibagger!!


Disclosure: Basant Agro Tech is part of my core holdings.