Friends,
I got this query from Kumra.
Hi Team,
Its true that simran farms is a gr8 pick but for no reason it has fallen down from 85 odd levels to 40....do u have any reason for this???
Whilst replying I realised that there were several reasons hence I am replying through a new post. Please appreciate that the reasoning given is my understanding of the situation.
The reasons are as follows.
a) The general downtrend in the market has reduced midcaps and smallcaps by an average of 50%-100% from their highs.
b) Monsoons are never a good time for poultry industry especially in North India because of festivals like "Navratri" etc. A lot of people also turn veggies during "Saawan".
c) Floods in North India led to dumping of products by farmers and this plummeted rates. Read this article on Economic Times.
Hence the profit margin for Simran plummeted in September 2010 quarter.
Let me leave you with a very interesting comparison between Simran Farms and Srinivasa Hatcheries. Sales for both the companies are about same but look at the market cap of both companies. Check it out guys.
Some of the difference can be ascribed to low levels of profit margin of Simran. But 16 crores compared to 114 crores. Thats a lot of difference. Isnt it?
Just imagine if Simran gets even close to the profit margins of Srinivasa Hatcheries.
Till my next post happy investing.
I got this query from Kumra.
Hi Team,
Its true that simran farms is a gr8 pick but for no reason it has fallen down from 85 odd levels to 40....do u have any reason for this???
Whilst replying I realised that there were several reasons hence I am replying through a new post. Please appreciate that the reasoning given is my understanding of the situation.
The reasons are as follows.
a) The general downtrend in the market has reduced midcaps and smallcaps by an average of 50%-100% from their highs.
b) Monsoons are never a good time for poultry industry especially in North India because of festivals like "Navratri" etc. A lot of people also turn veggies during "Saawan".
c) Floods in North India led to dumping of products by farmers and this plummeted rates. Read this article on Economic Times.
Hence the profit margin for Simran plummeted in September 2010 quarter.
Let me leave you with a very interesting comparison between Simran Farms and Srinivasa Hatcheries. Sales for both the companies are about same but look at the market cap of both companies. Check it out guys.
Some of the difference can be ascribed to low levels of profit margin of Simran. But 16 crores compared to 114 crores. Thats a lot of difference. Isnt it?
Just imagine if Simran gets even close to the profit margins of Srinivasa Hatcheries.
Till my next post happy investing.
Thanks for the information...Just one more query I had...Recently I have purchased sree rayalaseema hi strength hypo...could you please say how is looks for period of 1-2 years???
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