Saturday, May 28, 2011

IFB Agro Industries Ltd

Buy IFB Agro Industries Ltd--507438--CMP 76.

Buy on fall to 74 levels and keep adding. Very good results are posted with EPS of 22.26 and PE is adjusted to 3.43, book value of the counter is 108, and currently it is trading below its book value.

Again it is from Breweries and Distilleries segment, and growing at good pace. Its promoter holding is 55% and closed holdings of corporates, NRI, and big retailer is around 30% ---so one can say closely held equity is 85%.

Downside is minimum and upside could be to 100-110 levels in next 6-8 months, only negative is no dividend recommended by the company...

We advise buy small qty now and add on falls, buy 40% now and 60% on fall to 65-68 levels.

Business Description:
IFB Agro Industries Limited is an India-based company. It operates in two segments: spirit, liquor and spirituous beverages, and marine division. The Company's spirit, liquor and spirituous beverages segment consists rectified spirit, country liquor and Indian made foreign liquor (IMFL). The marine division consists of marine products processes and exports, domestic selling and marine feed trading. It products include spirits and spirituous beverages, whisky/rum/gin, frozen shrimps and prawns.

Company posted a little weak results in december 2010 and had taken beating and fallen to 64 levels, but with very good results for march qtr and full year ending 2010-11, it will get re-rating sooner or later. Company posted and EPS of 22.26 against full year EPS of 5.53, so now company is trading at PE of just 3.43, hence slowly it will move to PE of 10 and price target of 200 possible in next 6-8 months. Since market is dicey we recommend 50% buying at 76 levels and 50% in range of 65-70..

Should get good return in medium and long run, though short run market can put some pressure.

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Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.