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Camson Bio Technologies – Potential Multibagger ?

March 26, 2010

Camson Bio Technologies is India’s first wholly integrated agriculture biotechnology company. Camson has a first mover advantage in certain product categories. Its future growth will depend on its ability to leverage the growth potential in replacing the chemical pesticides using the residue free platform.

Camson is all set to leverage all the hard work put in over the last one and half decade. A typical biocide research takes 9 – 12 years. Similarly it takes 5-6 years to launch a new hybrid. Camson already has a proven track record of hybrid vegetable seeds with a complete range of over 49 varieties. In house library of selected and characterized microbes(3700) which have been found to be very effective in controlling various pests and pathogens through their secondary metabolites. Camson’s Biofertilizers are well known for their effective mobilization of nutrients to plant.

Ramesh Chand Garg is the Chairman of the Board of K S Oils Limited is a Strategic Investor.

Though Camson is a micro cap (~ US $ 50mn market cap) in terms of sales, net profit, etc., it is a niche and reputed manufacturer of nonpoisonous, eco-friendly, cost effective, zero residue Bio-technology Products through State-of-the-art technology. One will not do justice to this company by ignoring the massive pioneering R&D expertise accumulated over the years.

SBI Cap Research Associate Anil Advani wrote in a report,

Considering the revolution BT Cotton brought about, we must visualise Camson’s future on the same basis. Hence, we prefer to value Camson on the conversion of its pioneering R&D expertise to improved vegetables, fruits and enhanced biocides. At FY11E EPS of Rs 14 we can expect a P/E of 20x (sales traction, improving profitability, etc.) to arrive at a target price of Rs 280.

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