Watch the interview of Prakash Diwan, Director of Altamount Capital Management with Latha Venkatesh & Sonia Shenoy on CNBC-TV18, in which he shared his reading and outlook on market and specific stocks.
Below is the verbatim transcript of Prakash Diwan's interview with CNBC-TV18
Camson Bio Technologies
"Camson Bio Technologies has essentially been a seeds company. They have been taking the organic route to develop seeds, which is quite complex as a long gestation. So they have not hit the big time as far as the seeds business is concerned. What is very interesting is that they have a residual business, which has started doing much better and turned out to be much more profitable which is bio fungicides. It is an equivalent to pesticides but non-chemical based and it competes in the same efficacy as the normal family of pesticides. They also have insect repellents which are naturally created through tissue culture which is very interesting. This technology is something which is completely R&D oriented. So you cannot buy it off the shelf."
"Camson Bio Technologies is now set out to do a de-merger of the seeds and the residual business and that is going to make it very interesting, they already have a library of about more than 4,000 microbes and fungicides and the bio-fungicides and are also getting into natural fertiliser, which is very big thing globally. The Japanese are way ahead in it but we haven’t yet had any technology transfers of that. Dhanuka Agritech is already talking to a couple of their partners in Japan for getting into that but it has not happened," he said.
"Seeds business has taken off in India at a very different level now. The P/E multiples have changed. People have started recognising the kind of scalability and headroom for growth that they have. You have even today Kaveri Seed hitting the FII limits. Camson is a very well run company, the management has very clear focus, they know their business."
"The company has put up a new plant in Bangalore called Doddaballapur, which is on the outskirts of Bangalore and that is something which is likely to increase their capacities significantly without much of capex. So I think the stock should start doing extremely - there is some 60 percent kind of margins that they have on the biocides business which is amazing. I think you should look at it a bit seriously, we have discounted about Rs 15 EPS with FY17 that should give you a very modest target of Rs 180," he added.
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