Roses for greetings and Food for thought
Founded by SRK (Sai Ramkrishna Karuturi) in the year 1994, Karuturi Global has matured into a leading producer of cut roses and has aggressive expansion plans in the area of production of premium cereals to covert itself into a Complete Agriculture production company. About Karuturi’s Business
1. Company grows roses on an area of 239 hectares and has a capacity to produce 555 million Rose stems annually. It has operations in India, Kenya and Ethiopia which are low cost production bases. US, Europe and Japan are the key markets served by the company. Europe is the largest consumer for Roses and the company has 9% share in this market.
2. The game changer proposition however is company’s entry into cultivation of premium cereals, Edible oils and processed foods. Karuturi has acquired 3.11 Lac Hectares of land parcel on lease in Ethiopia for this purpose.
3. Out of above 3.11 Lac hectares, company has already started operations on 11 K hectares for maize and Rice cultivation. On the 3 Lac hectares, the company proposes to grow cereals and Oil Palm. The company plans to cover a major area of the above in cultivation in the next two years.
4. The agriculture business will primarily cater to the COMESA (Common market for Eastern and Southern Africa) which has a population base of 400 Million. Hence there is a ample market for company’s produce.
The information on Moneycontrol is not 100% accurate because only standalone results are shown and consolidated results are ignored. The book value of kgl is abt Rs15.50 as per india infoline website,also diluted eps is more than Rs.2 and thus the p/e ratio is 5-6......i wonder how most of the people give their views without a proper study. According to me karuturi came below Rs.12 to make new lows because warrants were converted to equity shares at Rs.12 and also Mr.Ram Karuturi wanted to raise his holding @ a lower price so they dragged the price further down to Rs.10.45.
Karuturi Global has 14 subsidaries:-
1 KTPL Karuturi Telecom Pvt Ltd
2 KFTPL Karuturi Floritech Pvt Ltd
3 KFPL Karuturi Foods Pvt Ltd
4 KFEPL Karuturi Flower Express Pvt Ltd
5 KOL Karuturi Overseas Ltd
6 EM PLC Ethiopian Meadows PLC
7 KA-PPL Karuturi Agro Products Plc
8 SBPL Sury Blossoms Plc
9 FZE Flower Xpress FZE
10 KL Karuturi Ltd
11 RHL Rhea Holdings Ltd
12 SHL Surya Holdings Ltd
13 YIL Yashoda Investments Ltd
14 KHL Karuturi Hospital Ltd
If you go through the consolidated balancesheet and P/L A/c, you will realise that KGL makes most of its profits through its 100% owned subsidaries mentioned above.
The stock has a potential to make new highs @ around Rs.50 after 2nd quarter results in October 2011 and then onwards add Rs.25-30 every quarter as the revenues from rice,sugarcane etc,. hit the balance sheets!!!This script is not for the faint hearted but for people who invest in potential multibaggers after careful study of facts and fundamentals of the company.
Download:
Please care to correct me if im wrong with my facts/figures.
Regards,
Tejas
