The Stock for "NO LOSS NOVEMBER"- "KaveriSeedis "

KaveriSeedis one of the fastest growing seed company in India with a large network of over 15,000 distributors and dealers spread across the country. With over 700 employees and a strong product line of hybrids. The company is wait to go greater heights with its renewed focus on R&D and strong intent to invest in innovation by the management. Over 600 acres of farm land owned by the company an the Company has experienced in seed production of major agricultural crops and very strong in-house R&D program for crops maize, cotton, sun flower, bajra, sorghum, rice and several vegetable crops. 

  • The Company figured in the Forbes Listing Under Top 200 Companies (Best Under a Billion in Asia Pacific Region) successively for a third time 
  • Kaveri Seeds is highly dependent on the cotton business which contributes ~60% of its overall revenues. 
  • The Cotton seed volumes grew 27%. As margins improved operating profit and net profit increased. 
  • Kaveri seed can provide the much required hedge against geographical concentration and provide growth stability for investors. 
  • The company said we are targeting that non-cotton business should be 50% to 60%. 

Fundamental Analysis 
Kaveri seed company ltd has market capitalization of 4048.35 Crore Currently.Mr. Gundavaram Venkata Bhaskar Rao, a graduate in agricultural science, is one of the founder Promoters of the Company. the company has engaged into production and marketing of agri-inputs (seeds of wide range of crops such as corn, sunflower, cotton, pearl millet, grain sorghum, paddy and hybrid vegetables, and also micronutrients, bio products and organic products). 
  • The company is virtually debt free which is very good for the financial health of the company. 
  • Company has a good return on equity (ROE) track record: 3 Years ROE 25.17% 
  • Price earning ration of the company is 30.54 and industry pe is 50.07 which indicates that stock is undervalued 
  • The company has lower pe compared to its close peers like Godrej Agrovet ,Advanta and Advance Enzyme.
  • The company has very large pool of reserves and surplus capital. 
  • The recent environment shows strong demand for the products of the company. 

Technical Analysis 
The stock formed double bottom pattern on daily and weekly chart and it has been observed that double bottom and double top on weekly chart of KSCL almost always achieved targets. Earlier double bottom formed from January 2016 to August 2016, Double top formed from September 2014 to March 2015, these were long term patterns but this time KSCL formed as Short term double bottom, first bottom formed in August 2017 and then second one formed in the last week of September. 

  • The break out of double bottom is above 592, the stock breaks this level on Friday 27 October but could not able to close above it. 
  • The strong point of this pattern is that it formed double bottom at the support of 200 day EMA. 
  • 497 and 500 are the two bottoms which now works as a strong support level 
  • A trend line drawn from the lows of September 2016 also works a support for the pattern. 
  • 548 is a also a key support and for those who don’t want to hold with big stop loss 

Buy above 592 is recommended for cash traders and for derivative traders buy KSCL November futures above 595 for the target of 640 and 710, Maintain stop loss below 548