Qualitative analysis essentially focuses on data which is hard to quantify into numbers or which is yet to be reflected in the numbers. In earlier blogs, we have mostly focused on quantitative analysis, crunching numbers, and arriving at a decision based on evidence generated. But there are certain aspects of investing which cannot be easily represented by numbers or ratios. In this blog, we will try to focus on an aspect of investing which is based on qualitative analysis.
As value or growth investors, we normally dive into numbers and make an informed evidence based decision. But by the time we make sense out of the numbers, more often than not, it is already discounted in the stock price. If we can identify some positive developments taking place in the company at an early stage, we can invest in the company at lower stock price levels. This approach requires thorough domain knowledge and is mainly practiced by sector experts. Nevertheless, for the benefit of our readers, we will try to explore the curious case study of JK Agri Genetics.
JK Agri Genetics is a key player in the production, processing and marketing of high-quality hybrid seeds for different crops like Bajra (Pearl Millet), Jowa (Sorghum), Rice(Paddy), Cotton, Maize (Corn), Vegetables, etc. and Plant Nutrients products. JK Agri has high tech research and development facilities in Andhra Pradesh, Telangana, Karnataka, Maharashtra, Gujarat, Bihar, Tamil Nadu, Madhya Pradesh, Rajasthan and Odisha.
Since JK Agri operates in the seasonal seed industry, the March and June quarters are very crucial for JK Agri Genetics and overall seed industry itself. These periods are crucial for the preparation and distribution of seeds to farmers, aligning with the beginning of major cropping seasons in India. Success during these quarters is important for the company, influencing its ability to meet the agricultural sector’s demands effectively.
Analysis of such companies transcends beyond number crunching. It demands a healthy mixture of qualitative and quantitative analysis. The influx of social media has provided many opportunities to conduct multidimensional company research. New age stock analysis particularly involves tracking social media accounts of companies and spotting interesting developments that help us make important investment decisions. While researching, I noticed some interesting developments in JK Agri Genetics’ LinkedIn account.
- Over a period of the last 6-9 months, JK Agri Genetics’ LinkedIn followers have almost doubled and now crossed 1 lakh followers.
- Mr. KK Pandit has joined as the Managing Director on 25th November 2023.
- The company has welcomed 200 new employees in the largest induction program in the history of Indian seed industry. Following are some highlights posted on their LinkedIn account.
- Also, company is continuously posting job advertisements for various posts, especially in seed tech indicating they are keen on improving their seed portfolio.
- JK Agri has also introduced various new seed products and has even earned a packaging award for innovative technology and development. Following are some posts from their LinkedIn account.
- The company is continuously hosting distributor meet ups from various zones across India which clearly indicates that the company is putting efforts to strengthen the supply chain.
An analysis of the LinkedIn data shows that the company has roped in Mr. KK Pandit as Managing Director. Since his appointment, we can see that company has redesigned its packaging and has also received a prestigious packaging award. It can be seen that the company is trying to strengthen its distribution network, hiring area managers to monitor the distribution and product feedback, and investing into skilled manpower and product development, especially in new product launches across vegetables and field crop sector. This will reduce the company’s reliance and dependence on cotton. Previously, company’s sales were predominantly happening in March and June quarters. The September and December quarters were traditionally lean seasons due to over dependence on one crop. This new diversified portfolio will help to generate sales even during lean quarters. Earlier, during lean seasons, the company was making losses as sales were sluggish and there were fixed operational costs. Now, with the new diversified product portfolio, there will be better utilization of manpower and resources.
Mr. KK Pandit is an Ex-Coca Cola and Johnson and Johnson Executive and has very good expertise in FMCG, Pharma, and Food and Beverages industries. His impact is clearly visible on the company from the above discussed facts.
These are all structural changes which will take a long time (around 3 to 5 years) to reflect in actual numbers, but as we know stock markets are usually ahead of time trying to discount the future. Hence, we need to keep a close watch on this company for the next few quarters to see whether the business strategies adopted by the new Managing Director are actually paying off.
The information provided by Finance Voyager is for information purposes only and is not intended for advice. Finance Voyager also does not make any recommendation or endorsement as to any investment, advisor or other service or product. The information is only for educational purposes and not buy or sell recommendations.