Here’s the BSE notice:
“Freshtrop Fruits Ltd has informed BSE that the unseasonal rainfall has affected the grape export business of the Company. The total exports of grapes for the season would be 30 to 35% less than last year but there is a significant improvement in the selling price. The unseasonal rainfall will have not any significant effect on the profit of the Company for 2014-15. The effect will be there in Q1 of 2015-16 but this could be mitigated by better price realization.”
Its very good that company came out with this clarification. Its all thanks to the efforts of numerous investors like you who persistently kept on asking the company about the possible effects of unseasonal rainfall. It looks that though the Topline might be affected in FY 16, the EPS may not be affected much, and that’s a huge positive. Pricing improvement amid lower volumes displays pricing power and is again very encouraging. If investors remember, even in second quarter of FY 14 (as mentioned in the stock story) there were unseasonal rains (though only in maharashtra and much less ferocity) and they came out unscathed. If from this and last month’s unseasonal rains carnage they come out well (which looks possible from the above update), it will surely improve the confidence of investors in the capability of management because in a agriculture related business, the biggest risk is unseasonal rains and if this risk is addressed by management’s acute business acumen, then there’s no reason why freshtrop cannot command premium valuations.
God Bless !!!