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ACHIEVED TGT 20RS RETURN 131% - SANWARIA AGRO OIL LTD - Equity Research Report
DATE: 20/07/2017
  • COMPANY NAME: ACHIEVED TGT 20RS RETURN 131% - SANWARIA AGRO OIL LTD
  • BSE CODE: 519260
  • NSE CODE: SANWARIA
  • SECTOR: Edible Oils & Solvent Extraction
  • BUY: 8.950
  • SELL: 0.000
  • TARGET: 20.000
  • MARKET CAPITAL: 661 Cr.
  • FACE VALUE: 1
  • 52 WEEK HIGH/LOW: 16.4/4.35
  • BOOK VALUE: 4.48
  • DIVIDEND YIELD(%): Declared Interim Dividend 5% for the FY2017
  • PRICE TO BOOK VALUE: 2
  • DESCRIPTION:

     

    Dear Readers,

     

    Today Sanwaria is 20.74 Rs and achieved my recommended target 20 Rs and giving return 131%. and it was recommended at 8.95 Rs...........Giving 131% return within 2.5 months.....

     

    Book full profit.

    Regards,

    Kamlesh

    -------------------------------------------------

    Dear Readers,

     

    Wow fantastic.....Today (25/10/2017)Sanwaria now 18.82 Rs..........Was recommended at 9 Rs...........Giving 109% return within 2.5 months.....

     

    Book profit if some one wants as it is near our recommended target 20 Rs.

     

    Happy Investing!!

     

    Regards,

     

    Kamlesh

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    Part – 1 Company Overview:

    • It is a Sanwaria Group company.
    • 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.

     

    Overview about - Group Companies

    • Sanwaria Energy Limited
    • 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
    • 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
    • Sanwaria Foods Limited (SFL) has been incorporated in 1994.
    • The SFL has put up 70 TPD Flour Mill at Itarsi, in the State of Madhya Pradesh.
    • The product of Roller Flour Mill are Maida, Suji, Atta and Bran.

     

    • Sanwaria Warehousing & Logistics Limited
    • 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
    • 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.
    • The Company has setup 50 TPD Flour Mill at Itarsi and manufacture fortified wheat flour, wheat meal and Bran etc.

     

    • Sanwaria Singapore Pte Ltd.
    • It is a full subsidiary company of Sawaria Agro based in UAE.

     

     

    Overview of - Sanwaria Agro Oils Limited

    • Sanwaria Agro Oils Limited is a FMCG Food Processing company of the Sanwaria Group.
    • It was incorporated in April 1991, by Lt. Shri Ram Narayan Agrawal and commenced its operations in 1993.
    • The Company has manufacturing units at 3 location - Mandideep, Itarsi and Betul, strategically located in the food production and consumption belt in India.
    • 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.
    • It is ISO 14001, 22000, GMP and Halal Certified and Government Recognized Export Trading House.
    • The Group has sustained exposure in manufacturing/processing/trading of Soya Products, Rice and rice related products, food grains and pulses.
    • 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.
    • 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
    • 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
    • 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.
    • 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.
    • 11( Eleven) of such stores are already opened at different places of MP and another 10 (Ten) in pipeline.

     

     

    Product Distribution Network:

    • The Company has a strong distribution network with reputable brands like Sanwaria, Narmada, Sulabh and Nashira.
    • 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

    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:

    • Revenue for the March FY17 has increased by 30.32% to Rs. 35124.35 mn from Rs. 26952.46 mn in FY16.
    • 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%.
    • In the March FY17, EBIDTA stood at Rs. 1243.36 mn as against Rs.1188.59 mn in FY16.
    • In the March FY17, Net profit stood at Rs. 4397.37 mn as against Rs.1567.86 mn FY16.
    • EPS of the Company stood at Rs. 1.19 in FY17 against Rs.0.45 in FY16.

     

     

     

     

    June 2017

    • Revenue for the June FY17 has increased by 101.9% to Rs. 11521 mn from Rs. 5705.9 mn in FY16.
    • 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%.
    • EPS of the Company stood at Rs. 2.02 in FY17 against Rs.1.25 in FY16.
    • Change in business from Soya based Company to FMCG

     

     

    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:

     

    • Changes in business from agro based business into an FMCG Business.

     

    • Strong distribution network with reputable brands products like Sanwaria, Narmada, Sulabh and Nashira.

     

    • Growth in Net sale @ 20% CAGR from last 5 Years.

     

    • Growth in Net Profit @ 21% CAGR from last 5 Years.

     

    • Growth in EBITDA @ 15% CAGR from last 5 Years.
    • The company is operating Soybean rich state where soybean easily available.
    • Due to growth in Food processing industries in India
    • Due to increasing demand of Soya based products in India and outside.
    • The Company has a strong products distribution network and Marketing network
    • Exporting products to Middle East & Africa.
    • Singapore based 100 %Subsidiary company which will get business from rest of the world along with cheaper finance facilities.
    • 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

     

    Recommendation:

     

    • 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:

    • 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.

     

     

     

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