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Reduce Simran Farms and some more thoughts

with 4 comments

While Simran Farms continues to rise, it would be better to reduce from 80+ Rs levels as there is no clarity on sharing money with minority shareholders. Management has doubled their salary without mentioning when or if the dividend will be paid.

Selling now may look like a mistake in hindsight, happy to be wrong than sorry, and I may end up buying again @ 200 Rs but for now, until they mention and pay dividends I will gradually reduce stake. Happy to buy at higher levels again when credibility through dividends is established.

I’ve pondered over this a few times, as a generalised blanket statement “Indians love money but lack equivalent passion”. Nor do their products appear let alone dominate in supermarkets across the world, global take off is an issue. Hawkins of Hawkins Cooker was borrowed from an English company, Prestige part of TTK Prestige again from a UK company, Eveready brand in India fell into Indians hands due to Bhopal Gas disaster. Where is the classy company that has gone global built in India by Indians ? Part of the issue is 200+_ years of Industrial revolution skipped India by in British rule. I would attribute that to lack of shrewdness in Indians again, a lesson still not well learnt.

There is difference between honesty, integrity, kindness and shrewdness and they are not mutually exclusive. As as wise man said, “One should be softer than flower when kindness is concerned but stronger than thunder when principles are at stake”. Its interesting to note cultural differences in east and west. I also feel that those in western world who dont understand the meaning of word “humility” and have to pull down the pants of opponents to win elections as psychologically stunted in their development and growth due to environmental reasons. Its a long debate, and I can go on…

Buffett considers enthusiasm as single most important criterion while making purchases, not price, nor even brand, while buying great companies. Comically attributing his success to lack of oversight in companies that Berkshire loosely controls, astute Buffett never buys out a business from management that is looking to cash out and retire.

Written by amitdipsite

October 6, 2010 at 8:17 pm

Posted in Uncategorized

4 Responses

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  1. it's good to see the transparency that you are trying to maintain…..great job amit !!


    October 6, 2010 at 9:05 pm

  2. All of a sudden, you seem to have developed a bearish outlook for Simran farms now. I m bit surprised because you were so bullish with Simran for almost a month and almost a U turn now. No doubt, to start with, the company does not have a website to be transparent enough to investors nor it has declared dividends of late despite posting strong past few Q results. I feel we should wait at least for Sept 2010 Q results & then you can advise on a decision 🙂

    Equity Guru

    October 7, 2010 at 9:47 am

  3. Not bearish on Simran Farms, or poultry sector. Poultry industry is set to grow 40% for the next 2-3 years and Simran farms may be around 150 Rs next years which is more than double. What led to change of my mind is annual report I saw last week @, I did not realise promoters had doubled their salary until few days back. There are many (more than 50) other stocks below 30 crore market cap, where promoters are increasing stake every quarter for the past 6 quarters, I like them since shares are disappearing from market. When Bhatias do something like this in Simran Farms I will buy again. There is no pessimism on Simran or Poulty but simply cautiousness to protect downside.

    Everyone has an opinion including myself and we are all free from any constraints to comply to my opinion.


    October 7, 2010 at 7:01 pm

  4. Dealing specifically with classy companies that may go global… I feel we'll hear good things about Larsen-Toubro, Mahindra and Tata Motors. Of course the realities have changed, that is why the two auto companies are piggybacking on renowned brands.
    One name we all overlook because of its present troubles- Air India was extremely well-known globally in the early years of its existence


    November 3, 2010 at 5:29 am

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