Free Essay

Indian Starch Sector V/S Chinese Starch Sector

In:

Submitted By mahesh
Words 4820
Pages 20
It is rightly said that ' To Grab an Emerging Opportunity in its Bud, One Needs to Keep His Ears close to Ground '. Investment is also based on this methodology and to extract maximum returns out of an Investment, one needs to keep eyes and ears wide open to sense early any opportunity coming in the way. In the last report titled ' Comprehensive Analysis of Indian Starch & Starch Derivatives Sector ' a deep tabular and a brief theoretical analysis was presented of last 10 Years' Data to understand the scope and potential of Indian Starch & Starch Derivatives Sector. Now, in this report, we will present a deep theoretical argument based on the study of Chinese Starch & Starch Derivatives Sector over last two decades to understand the tremendous growth opportunity Indian Starch & Starch Derivatives Sector provides in the coming decade. It is worthwhile to note here that Indian Sector is almost a replica of Chinese Sector and Indian Sector, as at 2010, is at a stage where Chinese Sector was there in 1992. Over the time period between 1992-2009, Chinese Starch & Starch Derivatives Sector has grown more than 10 times and Indian Starch & Starch Derivatives Sector is bound to replicate such growth in the span of coming 10 years. We will also include in our analysis the consumption-trend of Sugar vis-a-vis Starch in China as well as India as Starch-based sweetners form 50 % of the marketsize of Chinese Starch & Starch Derivatives Sector whereas use of Starch-based sweetners as a substitute to sugar is only now catching up fast in India. We will also discuss briefly in this report the valuation aspect of Chinese and Indian sector at macro level and micro level to understand the gross undervaluation of Indian sector vis-a-vis China and a certain rerating expected of Indian Sector to correct this undervaluation. Sections of The Report : ➢ Boom Phase in Chinese Starch & Starch Derivatives Sector evident from large-scale successful FundRaising by a major company as well entry of strong financial investors like Soros, Blackstone & Citibank into the sector ➢ Per-Capita Starch Consumption Study of last Two Decades of China ➢ A Brief Comparison of Indian Starch & Starch Derivatives Sector of 2010 with Chinese Sector of 1992 ➢ A Detailed Study of last two decades' Sugar-Consumption Trend vis-a-vis Starch-Consumption Trend of China and India ➢ Why Indian Starch & Starch Derivatives Sector is at an Advantage from Investment-point-of-view vis-a-vis Chinese Sector ➢ Macro Valuation Aspect of Indian & Chinese Sectors ( Sector Valuation Considered ) ➢ Micro Valuation Aspect of Indian & Chinese Sectors ( Individual Companies Considered ) ➢ Detailed Evaluation of Selected Top Indian & Chinese Companies based on their Installed Capacities & TTM as well as Latest Reported Revenues, Gross Profits, Net Profit, GPM and NPM. ➢ Conclusion

Boom Phase in Chinese Starch & Starch Derivatives Sector evident from large-scale successful FundRaising by a major company as well entry of strong financial investors like Soros, Blackstone & Citibank into the Sector To continue with last Analysis Report on impending boom in emerging economies' Starch & Starch Derivatives sector and an expected rerating of Indian Starch & Starch Derivatives Sector, financial investors like Soros, Citibank and Blackstone have sensed this opportunity by investing in China Starch Holdings Ltd. - the cornstarch leader of China - in August 2010. This investment comes after China Starch Holdings announced that in six months ending June 2010, the group has experienced highest cornstarch price in the history of its existence. For six months ending June 2010, Company's cornstarch sales increased by 58.7 % over the same period last year while the average selling price of cornstarch increased significantly to RMB 2,322 per tonne over RMB 1,690 per tonne of 2009 which reflects a YoY increase of 37.4 %. This is not just an isolated case as in July 2010, JP Morgan & Morgan Stanely successfully raised US$ 700 mn. for China Agri Industries, another major cornstarch player of China. The likely robust growth in company's corn processing business was one of the factors contributing to such a successful respone to its issue. Recently, China Agri Industries announced its results for six months ending June 2010 and in that its cornstarch sales reached 620,000 metric tons, contributing to a 76.4% growth in revenue. The realisation price of starch surged 36.2 % YoY while the gross profit margin was at 14.8 % up from 9.7 % of 2009. To continue further, Asia Bio-Chem Group, another major pure cornstarch player of China, registered a 144 % increase in topline and a 170 % increase in bottomline in second quarter ended June 2010. This is on back of a 110 % increase in topline and a 179 % increase in bottomline registered by the company in first quarter ended March 2010. Gross Profit Margin for both the quarters stood at a healthy 17 %. This is not the end as Luzhou Bio-Chem and Global Bio-Chem, both major corn products' players of China, have also reported healthy numbers for six months ending June 2010. Luzhou reported a 34.1 % rise in topline and 74.2 % rise in gross profit YoY while Global Bio-Chem reported a 13 % rise in topline and a 75 % increase in gross profit YoY for the six months ending June 2010. All these figures reflect the robust demand scenario for Chinese Starch & Starch Derivatives sector which, in a way, provides an excellent opportunity for proactive financial investors to start investing in Indian Starch & Starch Derivatives sector. This is because, Indian Starch & Starch Derivatives sector is like a replica of Chinese Starch & Starch Derivatives sector and as of 2010, Indian Starch & Starch Derivatives sector is at a stage where Chinese sector was in 1992. Let us see how :

Per-Capita Starch Consumption Study of last Two Decades of China

Indian Starch & Starch Derivatives sector is mainly composed of cornstarch, quite similar to the trend of China. India's per capita starch consumption as of 2009 is at 1.3 kg. while that of China is 9.8 kg. and USA is 64.5 kg. while world average is at 6.1 kg. Now, let's look back and study the Chinese sector to see what potential Indian sector has. In 1992, China's per capita Starch Consumption was at 1.1 kg. which went up to 1.3 kg. in 1994 and shot up to 2.1 kg. in 1995. Then, between 1995 to 1999 it remained in the range of 2.1-2.6 kg. and from 2000 it started registering exponential growth with 2000 per capita consumption standing at 3.7 kg., that of 2003 at 5.6 kg., that of 2005 at 8.5 kg. to the current 9.8 kg .

China
9. 8 8. 5

5. 6

Starch Consumption (in kg.)

3. 7 2. 1 1. 1 1. 3 2. 6

1992

1994

1995

1999

2000

2003

2005

2009

A Brief Comparison of Indian Starch & Starch Derivatives Sector of 2010 with Chinese Sector of 1992

In 1992, there were only 10 producers of starch & starch derivatives with production capacities exceeding 50,000 tonne per annum level in China. Also, in 1992, China had no producers with capacities greater than 2,00,000 tonne per annum. Today, as of 2010, China has 37 producers with a capacity above 50,000 tonne per annum and 19 producers with a capacity above 2,00,000 tonne per annum. To add, China today has 4 producers with an annual capacity of 1 mn. tonnes. Now, let's look at Indian Starch & Starch Derivatives Sector scenario as of today. As discussed before, India's per capita Starch Consumption today stands at 1.3 kg. As of 30 th June 2010. India has, in all, only 16 producers and out of them only 4 producers have production capacities exceeding 2,00,000 tonne per annum. This is quite similar to the trend experienced by Chinese sector in 1992 and the study of Chinese sector suggests that once per capita starch consumption crosses the threshold of 2.5 kg., it registers exponential growth thereafter very fast.

A detailed Study of last two decades' Sugar-Consumption Trend vis-a-vis Starch-Consumption Trend of China and India Now, let's look from the other angle. Let us study the corelation of sugar consumption and starch consumption as starch-based sweetners account for a major portion of an emerging country's starch consumption pattern. In 1992, China had a per capita consumption of sugar at 6 kg. whereas its per capita consumption of starch was at 1.1 kg. In 1995, per capita sugar consumption of china went up to reach only 6.5 kg. while its per capita starch consumption went up to reach 2.1 kg. Then, from 2001 onwards, sugar consumption went up at a faster pace with 2001 consumption at 7 kg., 2003 consumption at 9 kg., 2006 consumption at 10 kg. while 2009 consumption at 11.5 kg. On the other hand, if you look at per capita starch consumption of china for the same period then, 2000 per capita starch consumption stood at 3.7 kg., that of 2003 at 5.6 kg., that of 2005 at 8.5 kg. while that of 2009 at 9.8 kg. This clearly reflects a trend of rising substitution of sugar with starch-based sweetners in an emerging country like China.

Now, let us look at Indian sugar consumption pattern. In 1992, India had a per capita sugar consumption at 9.1 kg. and per capita starch consumption at 0.6 kg. Sugar consumption in India has shown a consistent uptrend with 2000 per capita sugar consumption standing at 15.5 kg. and 2009 consumption standing at 20.4 kg. Thus, between 1992 to 2009 per capita sugar consumption of China has increased by 91.67 % while that of India has increased by 124.17 %. In the same period, China's per capita starch consumption has increased by a whooping 790.91 % while that of India has increased by only 116.67 %.

China
11. 5 9. 8

India
20. 4

6

Sugar Consumption Starch Consumption 9. 1

Sugar Consumption Starch Consumption

1. 1

0. 6

1. 3

1992

2009

1992

2009

The rise in price of sugar as well as no likelihood of substantial respite from such rise in near future has recently given rise to a trend in India of substituting sugar with other alternatives and starch-based sweetners are occupying prominent place in this trend. By carefully studying the chinese consumption pattern of sugar vis-a-vis starch, it is but obvious that starch-based sweetners are likely to drive the growth of Indian Starch & Starch Derivatives market going forward. With current wide gap between per capita sugar consumption and starch consumption which are standing at 20.4 kg. and 1.3 kg. respectively, an exponential growth in consumption of starch to fill the wide gap is inevitable.

Why Indian Starch & Starch Derivatives Sector is at an Advantage from Investment-point-of-view vis-avis Chinese Sector Already top 4 players of the Indian starch industry have announced their intention to increase their capacity manifold in the span of next 3-5 years and FY10 as well as Q1FY11 has seen robust growth registered by each of the top player of the industry ( Refer Research Report on Comprehensive Analysis of Indian Starch Sector ). Per Capita Consumption of Starch in India is expected to reach 1.8 kg. in 2010 and 2.5 kg. in 2011 because of the robust demand expected from each of the user industry viz., Food & Beverages, Pharmaceuticals, Paper, Chemicals and Textiles and more downstream applications getting commercialised by top 4 Indian companies. If we look with the backdrop of Chinese Sector developments, then, Indian Starch & Starch Derivatives sector is at an advantage because of its more concentrated structure. In India, the top company

is cornering 35 % market share with its immediate competitor cornering less than half of it at 16 % market share and 80 % of the market is being served by top 4 companies. There is no denying of the fact that the size of Indian Sector is much smaller at just ` 2082.17 cr. but it is quite similar to the size of Chinese Sector size in 1992. In the short span of just 17 years, Chinese sector has grown 9 times its size of 1992 and such a robust performance can very well get replicated by Indian Starch & Starch Derivatives Sector in the span of just coming 10 years. This scenario can get more clear if one sees where Indian Sector was there in 2006 at a size of just ` 880.99 cr. The sector has already grown almost 2.5 times in the span of just 5 years and going forward it is expected to continue with such momentum looking at Q1FY11 size registered by the sector at ` 580.09 cr.

Macro Valuation Aspect of Indian & Chinese Sectors ( Sector Valuation Considered )

Now, let us look at the valuation aspect of Chinese Sector and Indian Sector. First consider Chinese Starch & Starch Derivatives sector valuation. At present, the sector is enjoying an average P/E multiple of 15.1 TTM EPS and an average forward P/E multiple of 11.3. Sector is enjoying an average 8.1x EBITDA TTM and 7.2x EBITDA forward. Sector is trading at an average market-cap-to-sales of 1.2. Let's now consider Indian Sector valuation. Indian Starch & Starch Derivatives Sector is currently enjoying an average P/E multiple of 12.88 TTM EPS and an average forward P/E multiple of 7.1. It is trading at an average 4.4x EBITDA TTM and 3.1x EBITDA forward. Sector is trading at an average market-cap-tosales of 0.49.

P/E Comparison
16 14 12 10 8 6 4 2 0 P/E ( TTM )
Indian Starch Sector

15.1 12.88 11.3 7.1

P/E ( Forward )
Chinese Starch Sector

x EBITDA Comparison
9 8 7 6 5 4 3 2 1 0 8.1 7.2

4.4 3.1

xEBITDA ( TTM )
Indian Starch Sector

xEBITDA ( Forward )
Chinese Starch Sector

MCap-to-Sales Comparison
1.4 1.2 1 0.8 0.6 0.4 0.2 0 MCap-to-Sales ( TTM )
Indian Starch Sector Chinese Starch Sector

1.2

0.49

Micro Valuation Aspect of Indian & Chinese Sectors ( Individual Companies Considered ) Now, let's take an example of specific micro valuation. Consider the valuation of Riddhi Siddhi Gluco Biols Ltd. ( BSE – 524480 ), an Indian company enjoying 35 % market share on an all-India basis of Indian Starch & Starch Derivatives Sector and a 45 % market share in Northern India. This company is used as a proxy by world's 4th largest cornstarch producer Roquette Freres to gain quick entry into Indian market as and when market reaches a reasonable size. Roquette has made a strategic investment in the company by taking a 14.93 % equity stake in 2006. Without going into other details let's straightaway focus on the valuation aspect of the company and then compare its valuation with its Chinese peers. Riddhi is currently enjoying a P/E multiple of 11.8 TTM EPS and 5.31 forward. It is trading at a valuation of 3.9x EBITDA TTM and 2.54x EBITDA forward. It is enjoying a market-cap-to-sales ratio of 0.62 TTM and 0.44 forward. Now, let's pitch this valuation against those enjoyed by Riddhi's Chinese peers : China Starch Holdings (HKSE – 03838) in which recently Soros, Blackstone and Citibank took an

equity exposure is trading at a P/E multiple of 29.8 TTM EPS and 22.77 forward. It is enjoying a valuation of 22.71x EBITDA TTM and 14.51x EBITDA forward while its market-cap-to-sales ratio stands at 2.13 TTM and 1.79 forward. China Agri Industries (HKSE – 00606), which, in July 2010, successfuly raised 700 mn. US$, is trading at a P/E multiple of 15.1 TTM EPS and 11.3 forward. It is enjoying a valuation of 9.2x EBITDA TTM and 6.9x EBITDA forward while its market-cap-to-sales ratio stands at 0.85 TTM and 0.61 forward. Asia Bio-Chem (TSX.V – ABC) is trading at a P/E multiple of 29.7 TTM EPS and 6.4 forward. It is enjoying the valuation of 17x EBITDA TTM and 3.4x EBITDA forward while its market-cap-to-sales stands at 0.95 TTM and 0.42 forward.

P/E Comparison
35 30 25 20 15 10 5 0 P/E ( TTM )
Riddhi Siddhi Gluco China Starch Holdings

29.8

29.7 22.77 15.1

11.8 5.31

11.3 6.4

P/E ( Forward )
China Agri Industries Asia Bio-Chem

x EBITDA Comparison
25 20 15 10 5 0 x EBITDA ( TTM )
Riddhi Siddhi Gluco China Starch Holdings

22.71 17 14.51 9.2 6.9 3.9 2.54 3.4

x EBITDA ( Forward )
China Agri Industries Asia Bio-Chem

MCap-to-Sales Comparison
2.5 2 1.5 1 0.5 0 MCap-to-Sales ( TTM )
Riddhi Siddhi Gluco China Starch Holdings

2.13 1.79

0.85 0.62

0.95 0.44 0.61 0.42

MCap-to-Sales ( Forward )
China Agri Industries Asia Bio-Chem

Detailed Evaluation of Selected Top Indian & Chinese Companies based on their Installed Capacities & TTM as well as Latest Reported Revenues, Gross Profit, Net Profit, GPM & NPM Now, after considering the micro valuation aspect of selected Indian and Chinese companies, it is now time to pitch the Starch & Starch Derivatives Sector leader of India against 2 top companies of Chinese sector in terms of Installed Capacity, Revenue Generated from such capacity, Gross Profit & Net Profit generated, Margins achieved in TTM as well as in latest reported results, etc. to check the operational efficiency as well as judge the investment opportunity Indian Companies offer. Here, we have considered two chinese companies viz., Asia Bio-Chem (TSX.V – ABC) and China Starch Holdings (HKSE – 03838) as their business model as well as business segments closely replicate Indian Companies' business model and segments. Also, while considering figures of China Starch Holdings, we have only included the topline and profits of its 'Cornstarch & Ancillary Corn-Refined Products' business segment and excluded the business and profits generated by other segments like 'Lysine', 'Fertilisers', etc. as otherwise it will not result in fair and accurate comparison. Also, Year-ending for Chinese companies is December while that of Indian companies is March. So, for TTM figures, we have considered reported results for year ended December 2009 of Chinese companies and year ended March 2010 for Indian Company. Latest Reported Results for Chinese companies is for six months ended June 2010, so, for fair and accurate comparison, for Indian Company too we have combined two Quarterly Results – for Quarter ended March 2010 and for Quarter ended June 2010 - and considered the results for six months ended June 2010. Asia Bio-Chem reports its figures in Canadian Dollar (CAD) whereas China Starch Holdings reports its numbers in Renminbi (RMB), so, for comparison purpose, we have converted the reported numbers of both the companies into Indian National Rupee (`) with the conversion rate of 1 CAD = 44.80 ` and 1 RMB = 6.9 `. Now, let's enlist all the parameters and then discuss each one in detail :

Riddhi Siddhi Gluco (BSE - 524480)
Installed Annual Capacity

Asia Bio-Chem (TSX.V - ABC) 900000
` 397.51 cr.

China Starch Holdings (HKSE - 03838) 1300000
` 983.73 cr.

440000
` 745.61 cr.

Revenue TTM

(CAD – 88.73 mn.)

(RMB – 1425.70 mn.)

Gross Profit TTM

` 119.91 cr.

(CAD – 14.39 mn.)

` 64.49 cr.

(RMB – 95.30 mn.)

` 65.76 cr.

Gross Profit Margin TTM ( in % )

16.08
` 39.21 cr.

16.2
` 9.45 cr.

6.7 NA

Net Profit TTM

(CAD – 2.11 mn.)

Net Profit Margin TTM ( in % )

5.26

2.38

NA

Latest Reported Revenue
(for 6 Months ended June 2010)

` 434.02 cr.

(CAD – 96.81 mn.)

` 433.74 cr.

(RMB – 856.08 mn.)

` 590.70 cr.

Latest Reported Gross Profit
(for 6 Months ended June 2010)

` 94.06 cr.

(CAD – 16.36 mn.)

` 73.31 cr.

(RMB – 95.39 mn.)

` 65.82 cr.

Latest Reported Gross Profit Margin in %
(for 6 Months ended June 2010)

21.69

16.95

11.1

Latest Reported Net Profit
(for 6 Months ended June 2010)

` 39.53

(CAD – 6.59 mn.)

` 29.53 cr.

NA

Latest Reported Net Profit Margin in %
(for 6 Months ended June 2010)

9.11

6.81

NA

Following things need to be noted from above figures : (1) With an installed capacity of just 4,40,000 tonnes per year, Riddhi Siddhi is reporting on a TTM basis a revenue which is : ➢ 75 % of that achieved by China Starch Holdings which is having a capacity of 13,00,000 tonnes per year and ➢ 2 times of that achieved by Asia Bio-Chem which is having a capacity of 9,00,000 tonnes per year. Problem at one of the plants of Asia Bio-Chem in the TTM period considered needs to be noted here which has got resolved subsequently thereafter and so the 'Latest

Reported Results' for 6 months ended June 2010 will provide a fair comparative picture of Aisa Bio-Chem and Riddhi Siddhi. (2) In 'Latest Reported Results', where we have considered results of six months ended June 2010 of all the three companies, Riddhi Siddhi has achieved a topline which is : ➢ 73 % of that achieved by China Starch Holdings which is having a capacity of 13,00,000 tonnes per year and ➢ almost similar to that achieved by Asia Bio-Chem which is having a capacity of 9,00,000 tonnes per year. (3) Gross Profit Margin of Riddhi for TTM is : ➢ almost 2.5 times of that achieved by China Starch Holdings over the same period ➢ almost same as achieved by Asia Bio-Chem over the same period (4) Gross Profit Margin of Riddhi for Six Months Ended June 2010 is : ➢ 2 times of that achieved by China Starch Holdings in six months ended June 2010 ➢ 1.3 times of that achieved by Asia Bio-Chem in six months ended June 2010 (5) Net Profit Margins of Riddhi for both, TTM as well as six months ended June 2010, has been 2.2 times and 1.3 times respectively of that achieved by Asia Bio-Chem over the same periods. Comparable figures of NPM for China Starch Holdings are not available as the company has other reportable segments like 'Lysine', 'Ferilisers', etc. which are not considered. To conclude the evaluation aspect, it is evident that with less than half the capacity as compared to Chinese peers, Indian Starch & Starch Derivatives companies like Riddhi Siddhi are reporting much better utilisation levels as well as operational efficiencies. In case of an accelerated growth of the sector driven by booming demand, Indian Companies, especially top 4 companies, are in a position to create much larger scale accompanied by robust cash generation as compared to Chinese peers.

TTM Comparison
(figures in ` cr. )

1200 1000 800 600 400 200 0

983.73 745.61 397.5 119.9 65.7 64.4 Revenue ( TTM )
Riddhi Siddhi Gluco (Capacity 4,40,000 TPA)

39.21

0

9.45

Gross Profit ( TTM )
China Starch Holdings (Capacity 13,00,000 TPA)

Net Profit ( TTM )
Asia Bio-Chem (Capacity 9,00,000 TPA)

Latest Reported Results Jan-June 2010 Comparison
(figures in ` cr. )

800 600 400 200 0 Revenue ( Jan-June 2010 ) Gross Profit ( Jan-June 2010 )
China Starch Holdings (Capacity 13,00,000 TPA)

590.7 434.02 433.74

94.06

65.82

73.31

39.53

0

29.53

Net Profit ( Jan-June 2010 )

Riddhi Siddhi Gluco (Capacity 4,40,000 TPA)

Asia Bio-Chem (Capacity - 9,00,000 TPA)

TTM Margin Comparison ( GPM & NPM )
( figures in % )

20 16.08 15 10 5 0 6.7

16.2

5.26 2.38 0

Gross Profit Margins ( TTM )
Riddhi Siddhi Gluco (Capacity 4,40,000 TPA)

Net Profit Margins ( TTM )
Asia Bio-Chem (Capacity 9,00,000 TPA)

China Starch Holdings (Capacity 13,00,000 TPA)

Latest Reported Results' Jan-June 2010 Margin Comparison
( figures in % )

25 20 15

21.69 16.95 11.1

10 5 0 Gross Profit Margins ( Jan-June 2010 )
Riddhi Siddhi Gluco (Capacity - 4,40,000 TPA)

9.11 6.81

0 Net Profit Margins ( Jan-June 2010 )
Asia Bio-Chem (Capacity - 9,00,000 TPA)

China Starch Holdings (Capacity 13,00,000 TPA)

Conclusion

Indian Markets have started trading at par, if not at premium valuations, than its peers like Hongkong and China. In such a scenario, investment into Indian Markets needs to get channelised in such sectors of the economy which are not only expected to register a double digit growth for next decade but offer potential for exponential growth in the coming decade. Indian Starch & Starch Derivatives Sector is one such sector of Indian economy which is expected to emerge as the next sunrise sector of Indian Economy. A Study of Chinese Starch & Starch Derivatives sector provided in this report confirm this prognosis and the current undervaluation as well as concentrated structure of Indian sector provide proactive financial investors a safe investment opportunity into the sector. A premium operational efficiency, a premium utilisation, a premium margin environment as well as a premium cash generating ability has to be rewarded by premium valuations and not by remnant valuations. Although in this report we have taken into consideration the financial parameters as well as valuation aspects of only the leader of Indian Starch & Starch Derivatives Sector which is the most efficient company of Indian sector, still, even if one goes down the line to 2 nd 3rd or 4th company, each of the company scores high in terms of operational efficiencies as compared to all the chinese companies. All the top 4 companies viz., Riddhi Siddhi, Anil Products, Sukhjit Starch and Gujarat Ambuja Exports (Maize-Processing Division) operate at much higher operating margins than Chinese companies and at net level their cash generating ability is much superior. Still, each of the company is available at a substantial discount to all Chinese peers , most probably because of their size of operations. However, with aggresive expansion in capacities planned over the next 3-5 years by each of the player, the size issue is expected to get corrected sooner rather than later. This process has already started with the leader of the sector viz., Riddhi Siddhi Gluco reaching the size of many of the Chinese Companies in FY10 and is expected to surpass the size of some of the Chinese Companies in FY11. A case in point here is the fact that with rise in size, the margins are expanding aggresively, in fact. at a much faster pace which augurs very well for the Top 4 Indian Companies. With Gross Margins and Net Margins of top 4 Indian Starch & Starch Derivatives Companies standing at double that of Chinese Companies while the valuation of them ruling at a significant discount to Chinese peers, a correction in valuation is expected in the near future because, gone are the days when Indian Markets were trading at discount to China and Hongkong. Now is the phase when one is seeing a premium valuation attached to India's Growth and in such a phase one is getting an opportunity to invest in a sector which is trading at a discount. Hence, a phase of discovery is bound to start for Indian Starch & Starch Derivatives Sector which will see it trading at par, if not at premium, to Chinese sector valuation. Underownership of the Indian sector players is another thing which will act as a hedge to any expected correction in Indian or World Markets and a single digit P/E valuation as well as sub-1x sales valuation provide a great margin of safety towards the investment into Indian Sector. Finishing again with the saying ' To Grab an Emerging Opportunity in its Bud, One needs to Keep His Ears close to Ground '. Investment is also based on this methodology and to extract maximum returns out of an Investment, one needs to keep eyes and ears wide open to sense early any opportunity coming in the way. Healthy FY10 and robust Q1FY11 numbers posted by each of the top 4 players of Indian Starch & Starch Derivatives sector are the developments that need to be sensed and the deep study of Chinese Sector – a replica of Indian Sector – is the tool one can use and the entry of financial investors like Soros, Blackstone and Citibank into Chinese Sector in August 2010 as well as successful fundraising by many companies of Chinese Sector are the prima-facie indications one can diagnose to predict the emerging opportunity of investment into Indian Starch & Starch Derivatives Sector.

Similar Documents

Premium Essay

Strategy

...NATIONAL MANUFACTURING COMPETITIVENESS COUNCIL Enhancing Competitiveness of Indian Manufacturing Industry: Assistance in Policy Making Final Report March, 2009 Enhancing Competitiveness of Indian Manufacturing Industry: Assistance in Policy Making DISCLAIMER CRISIL Risk and Infrastructure Solutions Limited (CRIS), a subsidiary of CRISIL Limited, has taken due care and caution in preparation of this Report. This Report is based on the information obtained by CRIS from sources, which it considers reliable. CRIS does not guarantee the accuracy, adequacy or completeness of any information contained in this Report and is not responsible for any errors or omissions, or for the results obtained from the use of such information. This Report should be used in its entirety only and shall not be reproduced in any form without prior permission from CRIS. CRIS and any of its directors, representatives or employees do not accept any liability for any direct, consequential or perceived loss arising from the use of this Report or its contents. CRIS specifically states that it has no financial liability whatsoever to the users of this Report. Final Report Enhancing Competitiveness of Indian Manufacturing Industry: Assistance in Policy Making TABLE OF CONTENTS LIST OF FIGURES...................................................................................................................................i LIST OF ABBREVIATIONS..........................................

Words: 56857 - Pages: 228

Premium Essay

Businnes Paper

...8 2.2.2 South Australia’s trade and comparative advantage ........................................................... 9 2.2.2.1 South Australia’s Revealed Comparative Advantage in comparison to other States and Territories .......................................................................................................................................... 12 2.2.2.2 2.2.2.3 Disaggregated Analysis of Key Agricultural Products ....................................................... 18 2.2.2.4 Possible Impacts of ChAFTA Commitments on Agriculture for South Australia ............... 20 2.2.2.5 3 Disaggregated Analysis of Key Non-agricultural Goods ................................................... 14 Wine Sector ....................................................................................................................... 22 Trade in Services and Investment .................................................................................................... 23 3.1...

Words: 65041 - Pages: 261

Premium Essay

Adultration

...PREVENTION OF FOOD ADULTERATION RULES, 1955 Part I PRELIMINARY RULE PAGE 1. Short title, extent and commencement 60 2. Definitions 60 vi CENTRAL COMMITTEE FOR FOOD STANDARDS AND CENTRAL FOOD LABORATORY 3. 3-A 4. 5. 6. 7. The Cental Committee for Food Standards Appointement of Secretary and other staff Central Food Laboratory GENERAL PROVISIONS AS TO FOOD Prohibition of import of certain articles of food Application of law relating to sea customs and powers of Customs Officers Prohibiton of manufacture, sale etc., of certain articles of food ANALYSIS OF FOOD 8. 9. 10. 11. 12. 13. Public Analysts Food Inspectors Powers of Food Inspectors Procedure to be followed by Food Inspectors Purchaser may have food analysed Report of public analyst v 18 19 19 23 28 29 14 15 15...

Words: 130594 - Pages: 523

Premium Essay

Global Trends in Energy Investment

...global trends in sUstainable energy investment 2010 Analysis of Trends and Issues in the Financing of Renewable Energy and Energy Efficiency United nations environment Programme Endorsed by Copyright © United Nations Environment Programme and New Energy Finance, 2010 This publication may be reproduced in whole or in part and in any form for educational or non-profit purposes without special permission from the copyright holder, provided acknowledgement of the source is made. UNEP would appreciate receiving a copy of any publication that uses this publication as a source. No use of this publication may be made for resale or for any other commercial purpose whatsoever without prior permission in writing from the United Nations Environment Programme. Disclaimer United Nations Environment Programme: The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the United Nations Environment Programme concerning the legal status of any country, territory, city or area or of its authorities, or concerning delimitation of its frontiers or boundaries. Moreover, the views expressed do not necessarily represent the decision or the stated policy of the United Nations Environment Programme, nor does citing of trade names or commercial processes constitute endorsement. Bloomberg New Energy Finance: The information contained in this publication is derived from carefully selected public...

Words: 33322 - Pages: 134

Premium Essay

Country Note Book of China

...Country Notebook The Country Notebook—A Guide for Developing a Marketing Plan The Country Notebook Outline (Click here for more information about the Country Notebook.) • I. Cultural Analysis  • II. Economic Analysis • III. Market Audit and Competitive Market Analysis  • IV. Preliminary Marketing Plan I. Cultural Analysis writing guide Guideline I. Introduction writing guide A significant aspect of China is its long cultural and national history. The Chinese people have shared a common culture longer than any other group on Earth. The Chinese writing system, for example, dates back almost 4,000 years. The imperial dynastic system of government, which continued for centuries, was established as early as 221 BC. Although specific dynasties were overturned, the dynastic system survived. China was even ruled at times by foreign invaders, such as the Mongols during the Yuan Dynasty, from AD 1279 to 1368, and the Manchus during the Ch'ing Dynasty, from AD 1644 to 1911, but the foreigners were largely absorbed into the culture they governed. It is as if the Roman Empire had lasted from the time of the Caesars to the 20th century, and during that time had evolved a cultural system and written language shared by all the peoples of Europe. The dynastic system was overturned in 1911, and a weak republican form of government existed until 1949. In that year, after a long civil war, the People's Republic of China, with a Communist government, was proclaimed...

Words: 17061 - Pages: 69

Free Essay

Whirlpool

...for recruitment to the Services and Posts mentioned below will be held by the Union Public Service Commission on 20th May, 2012 in accordance with the Rules published by the Department of Personnel & Training in the Gazette of India Extraordinary dated 4th February, 2012. (i) Indian Administrative Service. (ii) Indian Foreign Service. (iii) Indian Police Service. (iv) Indian P & T Accounts & Finance Service, Group ‘A’. (v) Indian Audit and Accounts Service, Group ‘A’. (vi) Indian Revenue Service (Customs and Central Excise), Group ‘A’. (vii) Indian Defence Accounts Service, Group ‘A’. (viii) Indian Revenue Service (I.T.), Group ‘A’. (ix) Indian Ordnance Factories Service, Group ‘A’ (Assistant Works Manager, Administration). (x) Indian Postal Service, Group ‘A’. (xi) Indian Civil Accounts Service, Group ‘A’. (xii) Indian Railway Traffic Service, Group ‘A’. (xiii) Indian Railway Accounts Service, Group 'A'. (xiv) Indian Railway Personnel Service, Group ‘A’. (xv) Post of Assistant Security Commissioner in Railway Protection Force, Group ‘A’ (xvi) Indian Defence Estates Service, Group ‘A’. (xvii) Indian Information Service (Junior Grade), Group ‘A’. (xviii) Indian Trade Service, Group 'A' (Gr. III). (xix) Indian Corporate Law Service, Group "A". (xx) Armed Forces Headquarters Civil Service, Group ‘B’ (Section Officer’s Grade). (xxi) Delhi, Andaman & Nicobar Islands, Lakshadweep, Daman & Diu and Dadra & Nagar Haveli Civil Service, Group 'B'. (xxii) Delhi, Andaman & Nicobar Islands, Lakshadweep...

Words: 50586 - Pages: 203

Premium Essay

Information and Communication Technologies in Tourism 2014

...Rodolfo Baggio Marianna Sigala Alessandro Inversini Juho Pesonen Editors Information and Communication Technologies in Tourism 2014 eProceedings of the ENTER 2014 PhD Workshop in Dublin, Ireland. January 21, 2014 Preface The advent of Information and communication technology (ICT) has had a paramount impact on tourism. The effects of this revolution continue to change the nature of contemporary tourism on a day-to-day base. The globalization of information, open innovation, better access, collaboration in a generation of information and technological convergence, have all contributed to the design of a new scientific paradigm. Thanks to our passion for research and to the continuous advancements in the technological ecosystem as well as the possibility of better understanding human activity and behavior we are on the threshold of a new era of the social science of tourism. This new social and technological paradigm affects tourism and human mobility in a way that gives the research process unheard-of possibilities. The current level of technological development allows for the construction of objects that are smaller, more intelligent and embedded in the environment and even wearable. These objects, which record and learn our habits are connected to the Internet and they have computing capabilities. They can also be interconnected and generate large quantities of information to benefit the environment in which they are located as well as the travellers that possess...

Words: 49996 - Pages: 200

Free Essay

Swn Jdkjkjje Jne

...to the Services and Posts mentioned below will be held by the Union Public Service Commission on 24th Aug., 2014 in accordance with the Rules published by the Department of Personnel & Training in the Gazette of India Extraordinary dated 31st May, 2014. (i) Indian Administrative Service. (ii) Indian Foreign Service. (iii) Indian Police Service. (iv) Indian P & T Accounts & Finance Service, Group ‘A’. (v) Indian Audit and Accounts Service, Group ‘A’. (vi) Indian Revenue Service (Customs and Central Excise), Group ‘A’. (vii) Indian Defence Accounts Service, Group ‘A’. (viii) Indian Revenue Service (I.T.), Group ‘A’. (ix) Indian Ordnance Factories Service, Group ‘A’ (Assistant Works Manager, Administration). (x) Indian Postal Service, Group ‘A’. (xi) Indian Civil Accounts Service, Group ‘A’. (xii) Indian Railway Traffic Service, Group ‘A’. (xiii) Indian Railway Accounts Service, Group 'A'. (xiv) Indian Railway Personnel Service, Group ‘A’. (xv) Post of Assistant Security Commissioner in Railway Protection Force, Group ‘A’ (xvi) Indian Defence Estates Service, Group ‘A’. (xvii) Indian Information Service (Junior Grade), Group ‘A’. (xviii) Indian Trade Service, Group 'A' (Gr. III). (xix) Indian Corporate Law Service, Group "A". (xx) Armed Forces Headquarters Civil Service, Group ‘B’ (Section Officer’s Grade). (xxi) Delhi, Andaman & Nicobar Islands, Lakshadweep, Daman & Diu and Dadra & Nagar Haveli Civil Service, Group 'B'. (xxii) Delhi, Andaman &...

Words: 47693 - Pages: 191

Premium Essay

Nutraceutical Survey

...timeliness or completeness of any such information. The information contained herein may be changed without notice. All information should be considered solely as statements of opinion and Cygnus will not be liable for any loss incurred by users from any use of the publication or contents Industry Insight-Nutraceuticals SYNOPSIS Along with the growing healthcare industry in India there is an emerging trend in growing consumerism for ‘Fast Moving Healthcare Goods (FMHG)’; worldwide known as Nutraceuticals, which are by definition, ingredients with human health benefits beyond basic nutrition. In this report, Cygnus has considered nutraceuticals along with functional foods to estimate the total market of nutraceuticals, both for global and Indian market. According to Cygnus estimates, nutraceuticals market in 2007 was INR18.75 billion and expected to grow at 20% CAGR to achieve a market size of INR27 billion in 2009. Global nutraceuticals market is estimated at USD120 billion in 2007 growing at 7% (CAGR). The US has been the major market for nutraceuticals with India and China becoming fastest growing markets. Nutraceuticals are gaining acceptance globally for their ability to address several diseases. Vitamins, Minerals and Nutrients constitute about 85% of the global market while antioxidants and anti-agents account for 10% other segments...

Words: 36372 - Pages: 146

Premium Essay

Joney

...in the contents of this guideline would be highly appreciated. Users may kindly contact with the following persons for their suggestions/ recommendations and queries (if any): 1. Md. Nur-un-Nabi General Manager nurun.nabi@bb.org.bd 2. Md. Lutful Kabir Deputy General Manager lutful.kabir@bb.org.bd 3. Mohammad Nurul Islam Joint Director mnurul.islam@bb.org.bd i Preface to the Fifth Edition In the light of current economic activities and experiences thereof, the fifth edition of the revised directory on compilation of Banking Statistics Returns is in the process of being published. Information/data on banking sector of the country play an important role in formulating monetary policy and determining the trend of economic activities. In order to meet that end, the SBS forms which were used earlier for collection of all types of information/data from the banking sector in Bangladesh have been revised and enlarged. The Statistics Department of the Bangladesh Bank published Banking Statistics Guidelines 8 (Eight) years ago in the form of a booklet for enabling the scheduled banks to fill in the above forms properly and submitting the same to the Bangladesh Bank. In the current edition of the booklet, detailed explanatory notes of the terms have been given in addition to the revisions of definitions of some terms. Necessary changes and modifications have also been made in some areas pertaining to deposits and advances and on codes relating to advances classified by economic purpose...

Words: 37348 - Pages: 150

Free Essay

Harampangan Ha Sinirangan

...CHAPTER 1 INTRODUCTION As the demand of Food Industry continues to upsurge at the present time, people as the consumers tend to explore for a unique food outlet which can offer products suitable to their taste and preferences. Since meals on the go are nothing new in the Food Service Industry, there is an outgrowing demand of people who are looking for healthy, “Home- Cooked Meals” and finding them outside their traditional way of eating. Food that is flavorful and healthy is making the grade, which explains why ethnic or native meals are among top home meal replacement preferences. Hence, Food chains are becoming popular already. Considering this fact, the proposed business is entitled “Harampangan ha Sinirangan”, this has the quickness of the service in fast-food chains and the convenience that most upscale restaurants gives to its customers and top it all with meals and delicacies that are inspired by purely Eastern Visayas Cuisine. The local residents and tourists as the major target beneficiaries, tend to discover a place where to gather, relax, enjoy and eat something new. Having these ideas, the proposed business would be a place that would cater with that needs and wants. It would be first Food Outlet that would offer purely native meals and delicacies. The proposed business would be situated at Real Street, Sagkahan Tacloban City. It is therefore accessible and is located near with the prospective target consumers. The proposed business would not only...

Words: 48069 - Pages: 193

Premium Essay

Bal Sara R Ase Ki Ne Bal

...BANGLADESH TRADE POLICY SUPPORT PROGRAMME Comprehensive Trade Policy Of Bangladesh - Draft Final, 15.09.14 - Trade Policy Support Programme (TPSP) Project Task Force – HAK Tower (2nd floor) 3/C-1 Karwan Bazar, Dhaka 1215, Bangladesh 0 BANGLADESH TRADE POLICY SUPPORT PROGRAMME TABLE OF CONTENTS List of Abbreviations ........................................................................................................................ 6 Preamble ....................................................................................................................................... 10 Chapter 1: Rationale, Objectives and Constituents ..................................................................... 11 1.1 Rationale .............................................................................................................................. 11 1.2 Objectives ............................................................................................................................ 14 1.3 Constituents............................................................................................................... 16 1.3.1 Trade in Goods....................................................................................................... 16 1.3.2 Trade in Services and Investment.......................................................................... 17 1.3.3 Behind the Border Policies ....................................................................................

Words: 87571 - Pages: 351

Premium Essay

Impact of Trade on Egypt

...FINAL REPORT Impact of Trade and Economic Policy Reforms on Key Sectors of the Egyptian Economy PREPARED BY ATR Project SUBMITTED TO USAID/Cairo Ministry of Foreign Trade SUBMITTED BY Nathan Associates UNDER CONTRACT NO. PCE-I-00-98-00016-00 Task Order 827 2 April 2004 Contents Executive Summary Egypt’s Economy in Relation to the Global Marketplace Trade Policy and the International Trade Regime Impact of Trade Regime Changes on Subsectors Conclusions Next Steps 1. Introduction 2. Egypt’s Economy and Its Place in the Global Arena Egyptian Economy Today Structure of the Economy Labor force, Employment and Unemployment Macroeconomy and Balance of Payments Trade Patterns Macroeconomic and Trade Policy Reform Current Challenges Distinguishing Characteristics of Egypt’s Economy Water Resources and Growing Population Pressure Oil and Natural Gas Geographical Location Egyptian Culture Higher Education Socialism and Its Aftermath Egypt’s Comparative Advantage in the Global Economy Changing Global Economy Egypt’s Economy in Relation to Three Waves of Globalization Revealed Competitive Advantage Analysis v vi viii xi xiv xvi 1 5 5 5 7 8 10 12 13 14 14 16 16 16 17 18 19 19 22 25 II 3. Trade Policy and the International Trade Regime Current Trade Regime in Egypt Tariff Structure Non-tariff Barriers to Trade Multilateral, Regional, and Bilateral Agreements Multilateral Agreements Regional Agreements Bilateral Agreements Trade Regimes of Major Trading...

Words: 75620 - Pages: 303

Premium Essay

Food and Bevarage

...co Food and Beverage Operations DHM 102 The Official Guide Boston Business School 520 North Bridge Road #03-01 Wisma Alsagoff Singapore 188742 www.bostonbiz.edu.sg All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the Publisher. This guide may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover, other than that in which is published, without the prior consent of the Publisher. The Guide is a useful resource for those seeking to gain the internationally recognised CTHCM qualifications. The Guide however must be used together with the recommended textbooks. CONTENTS 1. Introduction 2. Food Production Methods 3. Food Service Outlets 4. Food Service Methods 5. Food and Beverage Service Staff 6. Menus and Beverage Lists 7. Food and Beverage Service Area and Equipment 8. Food Service – Accompaniments and Covers 9. Food and Beverage Service Sequence 10. Beverage Service – Non Alcoholic Beverages 11. Alcoholic Beverage Service – Wine and Beer 12. Alcoholic Beverage Service – Spirits, Liqueurs and Bar Operations 13. Customer Care and Selling Skills 14. Functions and Events 15. Supervisory Aspect of Food and Beverage Management 1 5 31 46 65 77 92 113 128 167 181 207 228 244 262 1 Introduction Description The aim of Food and...

Words: 94338 - Pages: 378

Premium Essay

Food and Beverages Operation

...Food and Beverage Operations DHM 102 The Official Guide Boston Business School 520 North Bridge Road #03-01 Wisma Alsagoff Singapore 188742 www.bostonbiz.edu.sg All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the Publisher. This guide may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover, other than that in which is published, without the prior consent of the Publisher. The Guide is a useful resource for those seeking to gain the internationally recognised CTHCM qualifications. The Guide however must be used together with the recommended textbooks. CONTENTS 1. Introduction 2. Food Production Methods 3. Food Service Outlets 4. Food Service Methods 5. Food and Beverage Service Staff 6. Menus and Beverage Lists 7. Food and Beverage Service Area and Equipment 8. Food Service – Accompaniments and Covers 9. Food and Beverage Service Sequence 10. Beverage Service – Non Alcoholic Beverages 11. Alcoholic Beverage Service – Wine and Beer 12. Alcoholic Beverage Service – Spirits, Liqueurs and Bar Operations 13. Customer Care and Selling Skills 14. Functions and Events 15. Supervisory Aspect of Food and Beverage Management 1 5 31 46 65 77 92 113 128 167 181 207 228 244 262 1 Introduction Description The aim of Food and...

Words: 94338 - Pages: 378