Snapshot
BSE CODE: 526899
INDUSTRY: FOOD PROCESSING – FRUITS & VEGETABLES
CMP: 21.45
52 WEEK HIGH/LOW: 47.45 / 19.35
FACE VALUE: 10
MCAP: 108 Cr.
PE: 5.51
EPS: 3.89
BOOK VALUE: 24.45
LIQUIDITY: Low to Medium
OVERVIEW
Himalaya International is a Delhi based company who enjoys the status of India’s first frozen food enterprises company. HIL is engaged in frozen food segment including, processing mushrooms, baby potatoes and buffalo cheese. The primary business portfolio of the company comprises plantation and processing of mushroom and various vegetables besides it is engaged in production of cheese and yoghurt. Today over 500 people are working for company in the foothills of the Himalayas, in the presence of the cleanest air, water and the purest of all natures resources. It is also ISO, HACCP and GMP certified by international Audit agencies.
5 INVESTMENT THESIS:
Booming Sector: The agriculture sector in India has huge upside potential due to growing demand and increasing population. The food processing sector is all set for a strong growth in many years to come. Although organized sector is comparatively small, but it is growing at a much rapid pace. Approximately, The Indian food processing industry is estimated at US$ 100 billion. HIL is poised to take advantage due to its capability.
Expansion: Currently, Company is mulling to invest close to Rs. 250 Crore in Gujrat (Vadnagar, Mehsana ) and Rajasthan (near Jaipur). Export oriented Food Processing Plant in Gujrat will produce round Rs 350 Crore per annum with 20% strong Net Profit. Another plant near jaipur on 32 Acres will generate Almond processing & frozen and freeze dried berries. Both Plants will help company to move upward on both Topline and Bottomline.
Revenue in US market. Company is expected to improve its number on export and cheese manufacturing in US. HIL has some collaboration with US based company in order to improve its sale. US market is getting better than before so revenues will increase slowly & gradually which will help in overall PAT.
Financial: Himalaya International has reported a sales turnover of Rs 25.50 crore and a net profit of Rs 6.85 crore for the quarter ended Dec ’10. For the quarter ended Dec 2009 the sales turnover was Rs 22.38 crore and net profit was Rs 5.63 crore. Results were on expected line and it was increase of 20% profit on YoY without their new capacity which will start contributing from FY11. Due to expansion of Equity sized EPS was compressed although not in big way. Debt to Equity ratio is also not high which makes Financial quite healthy.
Future Growth : As per management, Gujarat operation will commence by March, 201 and it will have the full run in the next financial year. 2012, revenues estimate from Gujarat and Himachal should be in excess of Rs 200 crore. HIL has recently entered in the joint venture agreement with New World Paradigm, UK based company having expertise in hydroponic and green house. This development may help company to increase its income up to Rs. 100 crore during next fiscal.
View: The stock is trading at 21.45 Close to 52 week low due to Equity dilution and weak market sentiments. But By Looking Its future and earnings estimates, Long term Investors can BUY @ CMP and up to 18 for 100% capital appreciation in next 2 years.
Regards – EquityAhead Research!!
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