Saturday, January 14, 2012



Last week we have discussed the long term prospects of sugar sector stocks.Many of them appreciated in an average of 20% in  last week itself.Tea is another agriculture commodity having cyclical nature like Sugar.But the government control over this sector is very low compared with Sugar sector hence the supply demand scenario determines the price for a large extent.Tea prices showing a declining trend for a long time and now it is showing some signs of uptrend after a consolidation.As a true reflection of this trend , share prices of many of the listed tea sector stocks are hovering around multi month lows.From this tea pack I am selecting one company which is not so familiar for many of you -  Rossell India Ltd.There is many other companies in this sector but I feels this company's diversification plans makes it more attractive than other companies from the same sector.
                                                            Company having Five tea estates in Assam in an area of 4000 hectares.For the last financial year Rossell posted a turnover of Rs.80 Cr and a net profit of Rs.18 Cr EPS is Rs.5/- ( FV Rs,2 Shares). In addition to the conventional Tea business company having two more divisions- Aerospace/defense , and Hospitality. Potential of these sectors differentiate this company from other tea companies.Under the Bangalore headquartered  Aerospace and defense division - Rossell Techsys- company is offering services like custom embedded systems product design and development, product support services including Installation, testing, commissioning and maintenance, test solutions  including test jigs, rigs, and simulators etc , and  wire harness engineering and looming.Company representing many foreign companies like MacSema in India for their various products and services in Aerospace and defense.This division having an approximate employee strength of 70.

                                                          Recently company started a hospitality division to increase its presence in this sector.It is a point to note that company already having some experience in this field through their strategic investments in a company which is running the franchise of 'YUM'( owners of brands like KFC, Pizza Hut, and Taco Bell) in Nigeria.Few months before Rossell decided to start fast food chains in various cities in India too .It is not clear at this point that whether this is through a master franchise agreement of any well known brands or not.Anyway their previous experience in this field will be an added advantage.Apart from this ,company also having some interest in Lemon Tree Hotels which is running 12 hotel properties across India.

Company's share price is currently trading at Rs.40 /- with a P/E of 6 on the expected full year EPS of Rs.7/-. Considering the chances of an improvement in Tea prices, it is at the lower level .If the upcoming  fast food chain venture turn as a success and defense and aerospace division posts decent growth after the expected opening of private sector in defense , this unknown stock may be re rated sharply. Only on the valuation of Tea division itself  it is a better pick from the tea pack @ Rs.38/-

* Some of the information's ( About their Nigerian ventures)  are taken from Company website .No guarantee for its Authenticity


  1. sir
    aap ke charan kaha hai??hats off to you....

  2. Can Avanti Feeds be entered at current market price


  3. Dear Value Pick,
    I am an avid reader of your blog and hats off to you for providing us with such good multibagger ideas and avice. I have a small portfolio consisting of the below mentioned stocks.

    I would be thankful to you if you could provide an insight on the stocks and if you can tell whether to hold on to them or replace them with any other stocks.

    1. Vijaya Bank
    2.Syndicate Bank
    3. Tokyo Plast
    4. Nagarjuna Fertilizers
    5.Renuka Sugars
    7. Tata Steel
    8. Reliance Power

  4. Dear Debanjan

    I am not tracking majority of your stocks, so not in a position to comment on it.Sorry...

  5. Dear VPji,
    The international Tea market is down and beaten.
    I don't think there will be a recovery during 2012.
    Kenyan tea which is very cheap is ruling the market now.
    Still you think Rossell can improve?

    Neeraj Sharma

  6. Hi Valuepick Sir,

    Your View on Pioneer INvestcorp at CMP? is it a buy>?

  7. Dear Neeraj

    Generally we are always thinking about the negatives or positives of the industry only in short term without considering the already happened change in the share price of the company

  8. sir whats your view on assam company?
    thanks in advance

  9. Rossell India's Promoter holding increased from 74.46 to 74.47. Looks like car engine started for race..... Lets wait...........

  10. Hello Sir,

    Rosell India has started moving and promoter is increasing the stake continously.Do you have any updates ?

  11. Sir Ji,
    YOu have recommanded Rossell India Lts@38 on 14-Jan-2012.
    At present this is @39. In the last week there is sudden rise in the script. Do you know what is the reason? YOu are still recommanding BUY? Please advice... Raju P

  12. Rossell India has tied up with Canadian firm CAE Canada to provide simulation training solutions -

    Rossell India to open 30 Kebab Xpress outlets in 3 years -

  13. The company previously has held diverse interests in the hospitality sector both in domestic and international market. Earlier Rossell India held a minority stake in Lemon Tree Hotels which it divested last month for a profit of Rs 14 crore.

    Source :

  14. Promoters holding in Rossell India Ltd is 74.53 % Promoters increase their holding from 70.60 %, this is very good and strong point.

    Indian dividend

  15. Dear VP Sir,

    Do you still reccomend Rossell India at Rs.109/=?????



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