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Kothari Products


Kothari Products is engaged in international trading and real estate activities.

Its trading is mainly constituted of metals, edible oil, and machinery items.

It owns about 100cr of quoted investments at market.

The company has scaled up its international trade only recently and in the last nine months ended 31st December, 2011, it reported about 71cr of total operating profits before exchange losses and loss of 36cr after accounting for it.  This was on net sales of about 2,250cr. 

The business is exposed to government bans on imports/exports.  It is a large net importer exposing it adversely to a weakening INR.

Management have indicated their intention to focus on trading and expand in that area.  This is usually a low value-added activity with low margins making its profits unusually vulnerable to relatively small declines in trading revenues.

Management also maintains investments in companies operating in unrelated areas such as construction developers and internet ventures indicating a lack of focus.  Furthermore, not much information is provided about these investments, which doesn’t help an investor’s evaluation process.

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