Sarveshwar Foods Ltd : Emerging Value Play in FMCG
CMP : 39
ISIN: INE324X01018
Market Cap : 96 Crore
LISTED ON : NSE SME Emerge Platform
Lot Size : 1600
Time Frame : 18-24 Months
History of the Company :
Sarveshwar Foods Ltd was incorporated in 2004 and is primarily engaged in the business of processing and
marketing various types of Basmati and non-Basmati
rice in the domestic and international markets. The
operations are based out of the Jammu Region in the
State of Jammu and Kashmir.
The latest venture of the Company has been into
organic farming where the Company does contract
farming for rice, dry fruits, cereals, pulses in addition
to a variety of superfoods and has 22,000 acres of
certified organic farming land with the company.
The Company has presence in export
markets such as the USA, Europe, Middle East,
Australia etc. Company was listed on the NSE Emerge platform in
March, 2018.
Company owns 2 USFDA and BRC approved manufacturing facilities in Jammu and Kashmir for the processing of rice that have recently also got requisite approvals from Chinese authorities
Well-known clients and distributors of the company include names like walmart, Ebro, Big Bazaar, Costco, Nifol, Veetee, Vaishnav Devi Shrine Board Etc.
Main Business Activities :
- Food Processing/ Presence across entire Rice Value Chain
Financials of the Company :
- Profit After Tax (PAT) for the year ended on 31st March,2019 has been reported at Rs 18 Crore and turnover at Rs 566 Crore. (Consolidated Basis)
- As per the numbers as on 31st March,2019 the company has generated Return on Equity of approx. 16% , Return on Capital Employed of 15% and Return on Assets of 6%
- Debt to Equity ratio is below 2 and is reasonable in nature
Investment Rationale : Why to Invest in this Stock ??
- Shareholding of the promoters in the company is 74% indicating strong interest of promoters in the business as on 31st March,2019
- Market Cap to Sales Ratio : 0.20 is very attractive
- Book Value of Stock at present is 56 Rs per Share, which is 30% discount to current market price of the stock. Such a discount to book value provides a margin of safety to investors making investment in the company at current market price
- Technically on chart the stock appears to have completed the process of bottom formation
- At current price of 39 Rs per share and EPS of 7 Rs on trailing basis, the stock is presently trading at an attractive P/E ratio of 6
- At a forward reasonable P/E of 15 and EPS of 10.00, we expect the stock price to soar higher atleast to 150 and higher levels in coming time.
Attaching Investor presentation for more detailed analysis which is shared by the company in the investors section on it's website : CLICK HERE --> INVESTOR PRESENTATION 2018
Disclaimer Note: The above is not a research report but information as 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 Sarveshwar Foods Ltd in my portfolio and hence my point of view can be biased. Readers should perform own due diligence before investing. We do not assume any responsibility or liability resulting from the use of information , judgments and opinions for Trading or Investment purposes on the Blog.
