SANWARIA CONSUMER LTD
IS IT A POTENTIAL
MULTIBAGGER
RESULTS OF Q4 FY 2017-18
SANWARIA CONSUMER LTD is
attracting a lot of attention in recent past with each quarterly result moving
the company's sales and profits to higher levels. Q4 FY 17-18 is also good in
terms of sales and profits. The results are tabulated below.
Net sales in Q4 is 24% higher YoY and
11% Higher QoQ. Net Profits are higher 133% YoY and 42% QoQ. Current
Market price is around Rs.15.05 and the PE ratio is around 7.84. The volume of
transactions on NSE is good at over 24 lakhs. The company had issued Bonus
shares in the 2nd quarter of last year in 1:1 ratio. Yet, the price trend
indicates a growth in price of 113% over an year.
On an annual basis, FY 18 sales are at
Rs.5055 cr compared to Rs.3512 cr of FY 17. Net profit is at Rs.100 cr in FY 18
compared to Rs.440 cr in FY 17. Equity capital has doubled from Rs.37 cr to
Rs.74 Cr. Reserves have grown from Rs.375 cr to Rs.439 Cr.
On an annualised basis, the EPS is
Rs.1.94 compared to 1.66 last year.
So, the question
naturally arises - will Sanwaria consumer be a Multi bagger in current and
future years also?
The Price trend last
year was on a very LOW base of Rs.7. Currently also, the market price is not
significant, being at around Rs.15. The yearly growth in sales is good at 24%
and the quarterly growth in sales is even better at 11%.
It is INVESTOR FRIENDLY, having given
out 1:1 Bonus also last year and paying reasonable dividends even on enhanced
equity.Company proposed preferential allotment of equity shares of Rs.100 Cr
@Rs.35 per share, to reduce DEBT.
SANWARIA
CONSUMER
|
Mar
'18
|
Dec
'17
|
Sep
'17
|
Jun
'17
|
Mar
'17
|
YOY
|
QOQ
|
Net
Sales
|
1,407.82
|
1,273.49
|
1,221.47
|
1,152.10
|
1,132.37
|
24.33
|
10.55
|
Other
Oprtg Income
|
6.34
|
3.18
|
2.93
|
1.94
|
5.91
|
7.28
|
99.37
|
Total
Income
|
1,414.16
|
1,276.67
|
1,224.39
|
1,154.04
|
1,138.28
|
24.24
|
10.77
|
Raw
Materials
|
1,297.60
|
1,184.31
|
1,223.92
|
1,108.31
|
1,103.96
|
17.54
|
9.57
|
Increase
in Stocks
|
37.71
|
-6.57
|
-70.14
|
-17.33
|
-8.02
|
-570.2
|
-673.97
|
Employees
Cost
|
1.25
|
1.35
|
1.67
|
1.08
|
1.17
|
6.84
|
-7.41
|
Depreciation
|
1.82
|
1.82
|
1.82
|
1.82
|
1.98
|
-8.08
|
0
|
Other
Expenses
|
12.14
|
44.03
|
23.96
|
20.73
|
11.29
|
7.53
|
-72.43
|
P/B
Int., Excpt. Items & Tax
|
63.64
|
51.73
|
43.16
|
39.44
|
27.9
|
128.1
|
23.02
|
Interest
|
20.11
|
19.57
|
17.44
|
17.61
|
11.38
|
76.71
|
2.76
|
P
B T
|
43.54
|
32.15
|
25.72
|
21.83
|
16.51
|
163.72
|
35.43
|
Tax
|
7.84
|
7.07
|
4.67
|
3.21
|
1.22
|
542.62
|
10.89
|
Net
Profit
|
35.7
|
25.08
|
21.05
|
18.61
|
15.3
|
133.33
|
42.34
|
Equity-FV
rs.1
|
73.61
|
73.61
|
73.61
|
36.81
|
36.81
|
99.97
|
0
|
Basic
EPS
|
0.48
|
0.34
|
0.29
|
0.51
|
0.42
|
14.29
|
41.18
|
Diluted
EPS
|
0.48
|
0.34
|
0.14
|
0.51
|
0.42
|
14.29
|
41.18
|
MP
|
15.05
|
||||||
PE
|
7.84
|
||||||
VOLUME
|
2425816
|
on
NSE
|
|||||
PRICE
TREND
|
|||||||
19.05.18
|
1
week
|
2
week
|
1
month
|
3
month
|
6
month
|
9
month
|
1
year
|
Price
|
16.35
|
18.1
|
20.65
|
21.2
|
21.65
|
7.41
|
7.05
|
Gain
/ Loss
|
-7.95%
|
-16.85%
|
-27.12%
|
-29.01%
|
-30.48%
|
103.10%
|
113.48%
|
52
WK-HI
|
34.4
|
||||||
52
WK-LOW
|
6
|
||||||
MKT
CAP
|
1108
CR
|
Sanwaria consumer was earlier known as
Sanwaria agro Oils Ltd and the name was changed due to the changing product
profile of the company.
The company's Promoters are 1.Shri Anil
Agarwal, 2. Shri Gulab Chand Agarwal, 3. Shri Ashok Agarwal 4. Shri Satish
Agarwal .
We need to carefully examine the Latest
Investor Presentation of the company - to see what the future has in store for
the company.
The company's plants are at 1.SEP –
Itarsi (500 TPD) 2.SEP – Mandideep (1500 TPD), 3.SEP- Betul (500 TPD), 4.Rice
Plant- Mandideep (200 TPD) 5.Rice Plant- Itarsi (400 TPD), 6. Soya
Flour-Mandideep (10 TPD), 7.Soya Chunks- Mandideep (10 TPD)
Company’s premium products basket
consist of:
➢ Basmati Rice (Exotic & Premium- Raw/Sella)
➢ Refined Soyabean Oil, Refined Rice Bran Oil/ Fortified with vitamins
➢ 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
10 New Products are recently
Launched (Now total 35 products):
•
Cattle Feed
• Poultry Feed
• Mustered Oil
• Sunflower Oil
• Khandsari (Brown) Sugar
• Sumin seeds Powder (Jeera)
• Turmeric Powder (Haldi)
• Coriander seeds Powder (Dhania)
• Red chilli Powder (Lal Mirch)
• Tea
• Poultry Feed
• Mustered Oil
• Sunflower Oil
• Khandsari (Brown) Sugar
• Sumin seeds Powder (Jeera)
• Turmeric Powder (Haldi)
• Coriander seeds Powder (Dhania)
• Red chilli Powder (Lal Mirch)
• Tea
The company is now present across the
entire value chain of procurement, processing, product making, distribution and
marketing . It wants to market its Brands internationally.
Presence in a large and fast growing
segment :
The Company is amongst the top food
producers of soya/Paddy/Wheat products in India.
q The Group has sustained exposure in trading of food grains and pulses apart from soyabean products, wheat products, rice , oils and other food products.
Location Advantage :
The company’s operations in the
heartland of the soya & Paddy & wheat belt of India gives it a major
locational advantage reducing the logistics costs substantially.
The plants are located in MP which is a
power surplus state and hence the Company has access to cheap and uninterrupted
power supply.
The Promoters are in the business for over 45 years, enabling it to establish a very strong and efficient procurement system .
Strong relationship with farmers with 80 direct procurement centers across MP. Farmers bring their crop and company purchases directly from farmers.Company also procures goods from international markets to meet its requirements of soya oil.
it has ventured into modern trade by
tying up with various retail chains/malls like, Aaporti Super Market, Reliance
Mart, Pantaloon, Big Bazar, ITC Choupals,Wall Mart etc. Company has already
established separate channel to export its branded rice to Middle East and Africa.
The Company is venturing into different geographical locations through
Franchise Route.
➢It is starting business in Singapore through
100 % Subsidiary which will get business from rest of the world along with
cheaper finance facilities.
➢Net
Sales and PAT are expected to grow at a CAGR of 13% and 35% Over 2015 to 2018E,
respectively.
➢EBIDTA Margins are expected to increase due to improvement in manufacturing efficiency, increase in sale and change in product mix.
The company affirms that it will
"continue growth in top line and bottom line". Growth in Turnover in
FY 17-18 was 43.91%.
The revenue Mix in FY 14-15 indicates
that SOYA MEAL was the dominant item in sales with 74% of turnover. But, in FY
17-18, SOYA MEAL is down to 20.31%, and BASMATI RICE is up to 52.69%. Food
grains and others is at 21.86% of turnover.
Thus, the profile of the company is
changing drastically in recent years. Its products continue to change. It is no
more dependent much on SOYA for its growth. Now, it is a true FMCG company with
BASMATI RICE as the main contributor.
- Company has entered into an agreement with “Patanjali Ayurved Limited” to manufacture and supply Soya Chunks or Soya Bari inthe “Patanjali Brand”.
- So, company feels that - Looking to the recent tie-up of Patanjali with online platforms or virtual marketing networks like Flipkart, Amazon, Bigbasket, Grofers etc. SCL Products will also be available on all these platforms as a manufacturer.
BRAND BUILDING
• Company has already opened 25 stores
/ retail outlets in MP under the brand name “Sanwaria Consumer Shoppy”. 25 more
stores are in pipeline.
• Company will open 100 stores in MP
and Maharashtra. Thereafter, planning to cover other parts of India with 500
stores.
AWARDS
- Recently company is ranked 313th in amongst top 500 companies on the basis of turnover by “Fortune India 500”.
- The Company is ranked 283 in Financial Year 2016-17 amongst 1000 India's finest Companies on the basis of Net Revenue by the “The Financial Express – FE1000”.
“Sanwaria Consumer Ltd” is primarily
engaged in food processing which includes:
- Soybean Processing- for extraction of
Soya Oil, Soya Meal (De-oiled Cake), Soya Flour, and Soya Chunks (Soya Bari)
- Paddy Processing- for Basmati and Non Basmati Rice
-Rice Bran Oil Processing
- Paddy Processing- for Basmati and Non Basmati Rice
-Rice Bran Oil Processing
- Wheat Processing-for Flour, Maida,
Rawa, Suji, Dalia, Chakki Fresh Atta- Gram Processing- for Besan
➢ It has
a strong distribution network with reputable brands like Sanwaria,
Narmada, Sulabh and Nashira.
➢ It has strong backward integration for its raw material having innovative model of Direct Procurement Centers (DPC) across the state.
➢ Amazing forward network of C&F agents, Distributors, Retail chains, Malls for sale and marketing of its products.
➢ Sanwaria has adopted strategy to convert its conventional commodity and agro based business into an FMCG Business by adding new product range like Suji, Maida, Dalia, Besan, Chakki Fresh Atta, Poha, Soya Flour, Sugar Pulses and packaged food, etc.
➢ Presently have 35 no. of products which will be gradually taken to 50 and the finally to 100 no. of products basket with in next 2-3 years.
➢ It 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.
➢ It has
planned to open 100 ATM size stores starting with MP and then rest of India to
sell our products directly to consumers.
➢ Food
and food products constitute around 35% of the wallet spend. Out of this more
than 50% comprise of staples like wheat, rice and edible oil.
➢
Current per capita food expenditure in India is 1/6th of China and 1/16th of
US.So,it is likely to go
up in coming years.
➢ Spending on processed food is likely to surge 4x by 2020 as the segment has grown at a CAGR of 18% in the past five years. Soya products especially are gaining increased acceptance due to health consciousness.
Note : This analysis does
not constitute a recommendation for the BUY / SELL / HOLD decisions of
Investors, for which they need to make their own further analysis.
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