Dear Readers,
Today i am publishing my 2nd Multibaggers Stock report.
I consider this small stock as a multibaggers due to company's business diversion from Agro based products to FMCG business and due to strong future growth prospect of the food manufacturing industries.
Buy stock now and accumulate on dips.
SANWARIA AGRO OIL LTD
(Sector: Edible Oils & Solvent Extraction)
Date: 20/07/2017
Recommendation: Buy
Hold for 3 years
Target: 20 Rs
By Kamlesh Bavrva
CMP: 8.95
BSE Code: 519260
NSE Code: SANWARIA
Market Capital: 661
Cr.
Face Value: 1
52 Week Low / High:
16.4/4.35
Book Value: 4.48
Price/Book Value: 2
Dividend: Declared Interim
Dividend 5% for the FY2017.
Promoter Share Pledge: Nil
v It
is a Sanwaria Group company.
v Sanwaria Group is a well-known Madhya Pradesh
based Group in India, having presence since last more than two decades in
various sectors like Renewable Energy, Hospitality, Warehousing,
Infrastructure, power Sector and more prominently in FMCG Food Processing.
§ Sanwaria Energy Limited
v Sanwaria Energy Limited (SEL) has been
incorporated in 2005 and the main Business of the company is generation,
distribution, supply, and accumulation of electricity.
§ Sanwaria Infrastructures Limited
v Sanwaria Infrastructure Limited (SIL) has
been incorporated in 2005’ and the main business of the company is to develop,
construct, build, erect, demolish, alter, repair or any other work in
connection with building, roads, including highways, wells dams, canals,
reclamation or any other structural and architectural work.
§ Sanwaria Foods Limited
v Sanwaria Foods Limited (SFL) has been
incorporated in 1994.
v The SFL has put up 70 TPD Flour Mill at
Itarsi, in the State of Madhya Pradesh.
v The product of Roller Flour Mill are Maida,
Suji, Atta and Bran.
§ Sanwaria Warehousing & Logistics Limited
v Sanwaria Warehousing & logistics Limited
(SWLL) has been incorporated in 2010 and the main business of the company is to
take ware house on lease, rent, hire and in the business of as a fleet carriers
transporters in all its branches on land, air, water, & space, for
transporting goods, articles, or things on all routes and lines on National and
International level.
§ NS Agrawal Trading Corporation Limited
v NS Agrawal Trading Corporation Limited
(NSATCL) is engaged in trading of Food Grains, Pulses, Wheat, Oil Seeds, Cereal
etc and having Ashok Dall & Oil Mill (ADM) unit at Itarsi.
v The Company has setup 50 TPD Flour Mill at
Itarsi and manufacture fortified wheat flour, wheat meal and Bran etc.
§ Sanwaria Singapore Pte Ltd.
v It is a full subsidiary company of Sawaria
Agro based in UAE.
Overview of - Sanwaria Agro Oils Limited
v Sanwaria Agro Oils Limited is a FMCG Food
Processing company of the Sanwaria Group.
v It was incorporated in April 1991, by Lt.
Shri Ram Narayan Agrawal and commenced its operations in 1993.
v The Company has manufacturing units at 3
location - Mandideep, Itarsi and Betul, strategically located in the food
production and consumption belt in India.
v It is one of the largest integrated food
processors in India and is engaged in the business of manufacturing and selling
of Rice, edible oil and staple food products like Pulses, Sugar, Soya Chunks,
Wheat Flour, Rice Flour, Salt, Suji, Maida, Besan, Daliya, Soya Meal etc.
v
It
is ISO 14001, 22000, GMP and Halal Certified and Government Recognized Export
Trading House.
v
The
Group has sustained exposure in manufacturing/processing/trading of Soya
Products, Rice and rice related products, food grains and pulses.
v In Addition, the Company has marked it’s
presence in international market for Import and Export for its various
commodities and has a 100% Subsidiary in Singapore.
v
Recently,
the Company was ranked 336th in amongst 1000 India's finest Companies on the
basis of Turnover by the “The Financial Express”.
Company Manufacturing Plant Capacity:
1. Solvent Extraction Plant – Capacity of
2500 TPD,
2. Soya Refinery – Capacity of 250 TPD
3. Rice Milling Plant – Capacity of 500 TPD
v It’s all units are situated in Madhya Pradesh
and It’s a state where Soyabean, Paddy, Wheat are available in plenty along
with Skilled, semi-skilled and unskilled labor
v The Company has commissioned and started the
production of Basmati Rice with a capacity of 200 TPD in Mandideep in 2013 and
300 TPD in Kiratpur Itarsi in 2015.
v The Company has planned to open 100 ATM size
stores starting with MP and then rest of India to sell our products directly to
consumers.
v 11( Eleven) of such stores are already opened
at different places of MP and another 10 (Ten) in pipeline.
Product Distribution
Network:
v The Company has a strong distribution network
with reputable brands like Sanwaria, Narmada, Sulabh and Nashira.
v The Company has ventured into direct retail
by opening up ATM size retail outlets under the brand name ‘Sanwaria Kirana’ to
reach the end customer directly.
Products: Total 25
Products
§
Refined Soyabean Oil,
§
Refined Rice Bran Oil/
Fortified with vitamins
§
Basmati Rice (Exotic
& Premium- Raw/Sella)
§
Chakki fresh Atta
fortified with Soya Flour
§
Chakki fresh fortified
Protein & Iron rich Atta
§
Maida,
§
Suji,
§
Rawa,
§
Besan,
§
Daliya,
§
Pulses (Dals),
§
Soya Flour,
§
Soya Chunks (Bari)
§
Salt,
§
Sugar,
§
Poha
§
Soya Meal,
§
Soya Meal High Protein
§
Rice Flour,
§
Lecithin
§
Aqua Feed
§
Poultry Feed
Sanwaria Oil Shareholding Pattern:
|
Share holding Pattern
| ||
|
|
% Share holding
|
% Share pledged
|
|
Shareholding
of Promoters & Promoters Group
|
71.68
|
Nil
|
|
Public
(FII+DII) holding
|
28.32
|
|
|
Total
|
100
|
|
Focus on Quarterly results of 31March FY17 & June Q1 June FY2018:
|
Quarterly Results Comparison (Rs in mn)
| |||||
|
Particulars
|
31/03/2017
|
31/03/2016
|
|
30/06/2017
|
30/06/2016
|
|
Net sale from Operation
|
351243.51
|
269524.58
|
115209.83
|
57059
| |
|
Other Income
|
1375.18
|
1196.65
|
194.34
|
310.02
| |
|
Total
|
352618.69
|
270721.23
|
115404.17
|
57369.02
| |
|
Profit/Loss fom operation before
other income,fiance cost and exceptional item |
11706.29
|
11092.82
|
111460.19
|
54104.8
| |
|
Net Profit/Loss from
ordinary activities after Tax
|
4397.37
|
3409.49
|
1861.35
|
1084.6
| |
|
Extra ordinary items
(Net of Tax Expenses) |
0
|
-1841.63
|
0
|
0
| |
|
Net Profit
|
4397.37
|
1567.86
|
1861.35
|
1084.6
| |
|
Annualized EPS
|
1.19
|
0.45
|
2.02
|
1.25
| |
|
|
|
|
|
|
|
March 2017:
v Revenue for the March FY17 has increased by
30.32% to Rs. 35124.35 mn from Rs. 26952.46 mn in FY16.
v In March FY17, the Company marked the Net
Profit of Rs. 439.74 mn against Rs. 156.79 mn in the FY16 reflecting growth of 180.46%.
v In the March FY17, EBIDTA stood at Rs.
1243.36 mn as against Rs.1188.59 mn in FY16.
v In the March FY17, Net profit stood at Rs. 4397.37
mn as against Rs.1567.86 mn FY16.
v EPS of the Company stood at Rs. 1.19 in FY17
against Rs.0.45 in FY16.
v Revenue for the June FY17 has increased by
101.9% to Rs. 11521 mn from Rs. 5705.9 mn in FY16.
v In June FY17, the Company marked the Net
Profit of Rs. 186.1 mn against Rs. 108.4 mn in the FY16 reflecting growth of 71%.
v EPS of the Company stood at Rs. 2.02 in FY17
against Rs.1.25 in FY16.
|
Sanwaria Agro Oil Limited
(Fig in Rs. Cr.)
| ||||||
|
Particulars (Cr.)
|
Mar-17
|
Mar-16
|
Mar-15
|
Mar-14
|
Mar-13
|
Mar-12
|
|
Net sale/Revenue
|
3512.43
|
2695.25
|
2644.58
|
2445.28
|
1955.88
|
1411.75
|
|
Other Income
|
13.75
|
11.97
|
17.85
|
14.04
|
18.83
|
21.4
|
|
Total Income
|
3526.18
|
2,707.21
|
2,662.52
|
2,472.67
|
1,987.49
|
1,433.15
|
|
Total Expenses
|
3409.12
|
2667.29
|
2630.1
|
2441.4
|
1961.84
|
1413.94
|
|
Interest Expense
|
66.9
|
71.01
|
53.01
|
50.5
|
44.72
|
57.67
|
|
Depreciation &
Amortization
|
7.27
|
7.93
|
6.64
|
4.8
|
6.15
|
5.9
|
|
Total Tax
|
6.18
|
5.83
|
7.39
|
7.21
|
5.11
|
2.16
|
|
PBDIT
|
124
|
100.46
|
92.06
|
86.57
|
76.52
|
82.8
|
|
PBT
|
50
|
21.52
|
32.41
|
31.27
|
25.65
|
19.23
|
|
Net Profit
|
43.97
|
15.68
|
25.04
|
24.07
|
20.54
|
17.05
|
|
Equity
|
34.81
|
34.81
|
34.81
|
34.81
|
34.81
|
34.81
|
|
EPS
|
1.19
|
0.45
|
0.72
|
0.69
|
0.59
|
0.49
|
Financial Chart:
Investment Rational:
v Changes in business from agro based business
into an FMCG Business.
v Strong distribution network with reputable
brands products like Sanwaria, Narmada, Sulabh and Nashira.
v Growth in Net sale @ 20% CAGR from last 5
Years.
v Growth in Net Profit @ 21% CAGR from last 5
Years.
v Growth in EBITDA @ 15% CAGR from last 5
Years.
v The company is operating Soybean rich state
where soybean easily available.
v Due to growth in Food processing industries in
India
v Due to increasing demand of Soya based
products in India and outside.
v The Company has a strong products
distribution network and Marketing network
v Exporting products to Middle East &
Africa.
v Singapore based 100 %Subsidiary company which
will get business from rest of the world along with cheaper finance facilities.
v The Company is foraying into direct retail by
opening up company owned retail outlets under the brand name ‘Sanwaria Kirana’ to
reach the end customer directly
v Stock
CMP is 8.92 Rs. and stock is trading at P/E 12.65 & TTM EPS 0.71, Based on
above all points stock may touch 20 Rs. within a 3 years’ time horizon.
Please note:
v Note: The articles are not research reports but assimilation of information
available on public domain and it should not be treated as a research report.
Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”
Disclosure: It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments.
Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”
Disclosure: It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments.
Date: 18/05/2017
Part - I Company Overview
|
Company Name:
Ambition Mica listed in BSE SME segment (M Group)
BSE
Code: 539223
CMP: 50
and Share Lot Size - 2250
Market
Capital: 59.26 Cr.
Face
Value: 10
52 Week
Low / High: 23/80
Book
Value: 10.54
Dividend
Yield: Nil
Share Pledge
last 2 year: Nil
Current Price/Earning
(TTM): 26.91
TTM EPS:
1.44
52 Week
High/Low ratio – 3.5
Price to
Book Value: 4.74
|
Company Profile: Ambition Mica was incorporated in 2010. Company
IPO came on June 2015 and w.e.f 14 July 2015 Company listed in BSE SME segment
in M group. Ambition Mica Ltd is one of the leading manufacturers of mid
segment decorative laminates and door skins. They market laminates under brands
like Antique, Art Lam, Antique Aurum, Antique Colourcore and Antique Natural
Wood. They also market door skin under brand name Beautique, Texas, Micro
Touch, Antique Natural Wood and Door Touch.
They are
specialize in textured laminated and company has diverse range with 1152
designs in laminates and 429 designs in door skins that meets customer fancy.
Company at
Glance:
§ 1st
April 2011, plant started with production of 1mm laminate sheet and door skin
§ 7th
May 2011, company got Quality Management System Certificate and become ISO
9001:2008 Certified Company
§ 13th
January 2012, Bureau of Indian Standard granted ISI certificate to company for
unbeatable quality product.
§ 1st
October 2012, company started another hydraulic press to increase production
capacity 80,000 sheets/month to 1,50,000 sheets/month
§ 1st
November 2013, company became first laminate penal corporation in India who
launch their product in Android and I-Phone via Mobile apps
§ 15th December 2013, company started 3rd
hydraulic press to increase production capacity up to 2,20,000 sheets/month.
Brand: Company markets
laminates products under the brand name of:
§
Antique
§
Art Lam
§
Antique Aurum
§
Antique Colourcore
§
Antique Natural Wood
Distribution Network: Company has
strong dealership in Gujarat and other states.
Company have Antique brand
dealers in -
Ahmedabad,Mahesana,Rajkot,Vadodara,Himmatnagar,Surat,Banglore,Udaipur,Jaipur,Hydrabad,Aurangabad,Hariyana,Raipir,Kanpur,Punjab,Mumbai,Kanpur.
Company have Art Lam brand
dealers in - Ahmedabad,Rajkot,Pune,Mahesana,Vadodara,Surat,Banglore,Indore,Nagpur,Delhi,Hydrabad,Aurangabad.
Products:
1 mm Laminate
§ Antique (24C)
§ Anique Aurum
§ Art Lam
§ Colourcore
§ Natural Wood
0.8 mm Laminate
§
Lam Art
|
Share holding pattern as on 31st March 2016
| |
|
|
% Share Holding
|
|
Promoters Holding
|
72.97
|
|
Others Public Holding
|
27.03
|
|
Total
|
100
|
|
Ambition Mica
| |||||
|
Particulars (in Rs. Cr)
|
Mar-16
|
Mar-15
|
Mar-14
|
Mar-13
|
Mar-12
|
|
Net Sale
|
49.180
|
38.170
|
35.550
|
20.480
|
13.710
|
|
YOY%
|
29%
|
7%
|
73%
|
49%
|
|
|
Other Income
|
0.140
|
0.010
|
0.020
|
0.010
|
0.000
|
|
Total Income
|
49.320
|
38.180
|
35.570
|
20.490
|
13.710
|
|
Total Expenses
|
46.740
|
35.570
|
34.200
|
19.260
|
12.900
|
|
Interest Expense
|
1.790
|
1.560
|
1.140
|
1.190
|
0.940
|
|
Depreciation &
Amortization
|
0.500
|
0.460
|
0.490
|
0.380
|
0.290
|
|
TAX
|
0.860
|
0.870
|
0.510
|
0.350
|
0.530
|
|
PBDIT
|
4.890
|
4.620
|
3.000
|
2.790
|
2.060
|
|
PBT
|
2.600
|
2.600
|
1.370
|
1.220
|
0.830
|
|
Net Profit
|
1.710
|
1.740
|
0.870
|
0.870
|
0.290
|
|
Equity
|
3.970
|
2.900
|
2.900
|
2.250
|
2.000
|
|
EPS
|
4.300
|
6.000
|
3.000
|
3.900
|
1.500
|
|
OPM Margin %
|
9.620
|
12.100
|
8.380
|
13.620
|
14.880
|
|
Debt to Equity Ratio
|
0.820
|
1.390
|
2.280
|
3.080
|
2.350
|
|
Interest Coverage Ratio
|
2.450
|
2.670
|
2.200
|
2.030
|
1.880
|
|
Current Ratio
|
1.150
|
1.120
|
1.125
|
1.085
|
1.081
|
|
ROCE
|
10.450
|
12.810
|
6.850
|
8.250
|
3.970
|
|
ROE/RONW
|
13.630
|
25.230
|
19.110
|
25.820
|
12.910
|
§ Company has increased production capacity from 1,50,000 sheets/month to
2,20,000 sheets/month from December 2015 due to strong domestic demand and it
is a strong sign for the company to grow as management is investing in capex.
§ Strong Management and Promoters group
§ During the year revenue of the company has increased from Rs.3817.63 to
4931.75 Lakhs
§ During the financial period company’s reserves and surplus increased from
Rs. 398.30 to 573.90 Lakhs. The reserve further increased by the Rs. 322.20
lakhs on account of share premium received pursuant to issue of shares through
IPO.
§ The Profit of the company decreased in spite of increase in sales was
mainly due to increased competition in the market.
§ From the above financial data, company has posted over 38 % CAGR in five
years ending March 2016 while net profit came down 1.72 % on YOY basis.
§ From my point of view, any company has report CAGR above 20 is a good
indication. Ambition Mica Net profit has posted over 50% CAGR in five year
ending March 2016 which is above 20%.
§ Interest coverage ratio is 2.450 and in my point of view, interest coverage
ratio of below 1.5 should raise doubts the company’s ability to meet the
expenses on its borrowings.
§ Debt/equity ratio is 0.820 which is below 1
§ Current ratio is 1.15 and in my point of view, higher current ratio
healthier short term liquidity comfort level. A current ratio below 1 indicates
that the company may not be able to meet its obligations in the short run.
§ At CMP 50, Stock is trading at PE multiple of 11.6X to trailing twelve
month earning whereas industry average is 40X. This makes the stock undervalue
at current price.
So I value the company
at conservative PE of 25X the price comes at Rs.107. Hence stock can be a multibagger for the next 3 years.
Please note:
Note: The
articles are not research reports but assimilation of information available on
public domain and it should not be treated as a research report.
Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”
Disclosure: It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments. I am not responsible for any profit and loss and it is not a investment advice. This is only my experience point of view.
Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”
Disclosure: It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments. I am not responsible for any profit and loss and it is not a investment advice. This is only my experience point of view.
Dear Sir,
ReplyDeleteReally it is a valuable research report with buy recommendation.
I am eager to see your next report and stock recommendation.