It has been one of the dream performance over the last 2-3 years – the company’s revenue have grown at a CAGR of 88% over last 3 years, and the stock returns have also been fabulous.
Over last few days, there have been reports of reporting of EMS disease in the Indian Shrimp industry. The EMS has been confirmed and as a preventive measure, MPEDA has decided to halt fresh production for next 2-3 months. Though it is a short term negative development for the industry, few positives to note are: 1. The EMS reported is in very small portion of the sample (just 1%) 2. As December to February is a lean period for the industry hence the damage will be limited and if the preventive steps are properly undertaken then the industry can quickly come out of the problem. MPEDA has provided a detailed clarification.
As a caution, we have chosen to book profits and reduce the exposure, and monitor how things develop going forward.
Among the new ideas, we are currently studying: APM Industries, KCP Sugar, Kitex Garments and Muthoot Capital. We hope to discuss the latest quarterly results and a detailed analysis in the next article.