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Investment Research: Fundamental Coverage - Ifb Agro Industries Limited
Investment Research: Fundamental Coverage - Ifb Agro Industries Limited
Investment Research: Fundamental Coverage - Ifb Agro Industries Limited
Promoter Others
Capacity expansion in distillery division will result in cost optimization and company will
35% endeavor to perform better in coming years. Consolidation in the IMIL space has started and
65% it may create an opportunity for the company. The company expects additional sales
volume from ANDHRA PRADESH MARINE PLANT during current year.
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IFB Agro is a major player in the seasonal marine foods business in West Bengal with operations comprising
Domestic business, Exports and Feeds business. In the Domestic business, company has tie-ups with well-
known brands like Le Meridien, Jaypee Hotels, The Leela, Maharaja’s Express, Mainland China, Marriott
and Taj Hotels which would support the domestic business growth. Company also exports its tailor-made
products to various countries including the US, Japan, and Australia to countries in the Middle East and
Europe, to suit the customers' needs.
Marine exports have registered 64% growth in revenue during the current year due to full functioning
of the tie-up plant in Andhra Pradesh . Operating margins fell significantly during the year under review due
to the increase in the raw material prices and severe competition from South East Asia and Latin American
countries. Marine exports will continue to have margin pressure due to competitions from South East Asian and
Latin American countries. The high level of raw material prices and exchange fluctuations will continue to
weigh on Marine exports.
Company has increased the reach of retail and Hotel/Restaurant/Catering segment in major cities in India
resulting in increased sales in FY2017. Further, IFB plans to undertake aggressive marketing of its marine food
products to strengthen its presence into this segment in India. With improvement in global economic
growth outlook and increasing demand for frozen sea food, expects Marine division helps company to
achieve incremental revenue in years ahead.
Sales rose 23.01% to ` 336.34 crore in the quarter ended June 2017 as against ` 273.43 crore
during the previous quarter ended June 2016
Net profit declined 28.52% to ` 7.27 crore in the quarter ended June 2017 as against ` 10.17
crore during the previous quarter ended June 2016
Earnings per share (EPS) for the quarter ended Q1 FY 18 stood at ` 7.77, as compared with
` 10.86 for the quarter ended Q1 FY17.
Particulars % Change
Results Analysis
Q1 FY 18 Q4 FY 17 Q1 FY 17 (Q-O-Q) (Y-O-Y) FY 17 FY 16
Revenue 336.33 142.19 273.43 136.54% 23.00% 829.31 621.31 33.48%
EBITDA 15.12 10.89 20.80 38.84% -27.31% 62.27 59.17 5.24%
EBITDA % 4.50% 7.66% 7.61% - - 7.51% 9.52% -
PBT 9.70 6.35 14.54 52.76% -33.29% 40.22 36.11 11.38%
PBT% 2.88% 4.47% 5.32% - - 4.85% 5.81%
PAT 7.27 4.93 10.17 47.46% -28.52% 32.06 29.32 9.35%
PAT % 2.16% 3.47% 3.72% - - 3.87% 4.72%
EPS 7.77 5.27 10.86 47.44% -28.45% 34.23 31.31 9.33%
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Company Overview
IFB Agro, incorporated in 1982, manufactures and distributes Grain Alcohol, DDGS, CO2, Organic Manure,
Alcoholic beverages, Aqua feed and Processed Frozen Shrimps for Domestic and Export markets. Company
maintains state-of-the-art in-house R&D facilities equipped with modern instruments such as GCs,
spectrophotometers etc.
Valuation Conclusion
Company's restructuring efforts have started to reap benefits as the EBIT margins for spirit and liquor
business have improved during current quarter. Going forward, IFB’s concentration on the high margin
IMIL bottling business and cost control measures with the help of captive power plant will lead to an
improvement in the EBITDA margin.
Company exports its tailor-made products to various countries including the US, Japan, and Australia, and to
countries in the Middle East and Europe. Company also has a tie up with Thailand’s C.P. Group for supply of
feed to farmers. There is huge potential for the company’s marine business, given the company’s strong
customer base, rising demand for frozen sea food, and improvement in overall global economic growth
outlook. Further, rupee depreciation will boost revenue from export markets.
Long term volume and earnings growth opportunity is immense for India’s largest beer player with
strong barriers to entry in the form of distribution, brewery reach, scale and brands. However
operating environment over the next year is challenging both due to the highway ban and likely
margin dilution due to absence of input costs credit under GST.
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Net financials
Interest income - - - - - - -
Interest expenses (0.37) (0.17) (1.36) (1.74) (1.62) (1.20) (1.19)
Net Financial Items (0.37) (0.17) (1.36) (1.74) (1.62) (1.20) (1.19)
Reported Pre-tax profit 60.20 25.90 36.11 40.22 51.50 75.75 96.55
Reported Tax charge (18.54) (10.33) (6.79) (8.16) (10.56) (12.76) (17.49)
Reported Net profit 41.66 15.57 29.32 32.06 40.94 62.98 79.05
Minorities - - - - - - -
P/L OF ASSOCIATE CO. - - - - - - -
Rep. NP after min. Int. 41.66 15.57 29.32 32.06 40.94 62.98 79.05
Extra Ordinary income 14.53 - - - - - -
Rep.Net Income after
27.13 15.57 29.32 32.06 40.94 62.98 79.05
extra ordinary items
Number Of Shares
Opening Balance 9.37 9.37 9.37 9.37 9.37 9.37 9.37
Issued during the Period - - - - - - -
Closing Balance 9.37 9.37 9.37 9.37 9.37 9.37 9.37
FV 10.00 10.00 10.00 10.00 10.00 10.00 10.00
Wtd. Avg. no. of shares 0.94 0.94 0.94 0.94 0.94 0.94 0.94
Note:- The figures shown in the brackets means NEGATIVE.
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BALANCE SHEET
Particulars 201403 201503 201603 201703 2018E 2019E 2020E
Equity & Liabilities
Shareholders' Fund
Share Capital 9.37 9.37 9.37 9.37 9.37 9.37 9.37
Reserves and Surplus 196.68 212.26 241.58 273.65 314.59 377.57 428.63
Minority Interests - - - - - - -
Total Shareholders' Fund 206.05 221.63 250.95 283.02 323.96 386.94 438.00
Non-Current Liabilities
Long-term Borrowings - - 43.43 30.74 24.32 20.16 17.28
Other LT Liabilities 4.00 5.61 6.35 6.06 5.84 5.01 4.49
Deferred Tax Liability 9.29 17.50 16.07 17.67 18.27 20.68 23.39
Long term Provisions 1.51 2.50 2.23 0.13 0.14 0.16 0.17
Total Non-Current Liab. 14.80 25.61 68.08 54.60 48.57 46.00 45.34
Current Liabilities
Short term Borrowings 4.21 - - - - - -
Trade Payables 6.86 17.00 23.22 23.52 24.00 26.72 29.19
Other current liability 23.42 10.31 24.64 31.75 35.47 39.44 47.44
Short term Provisions 0.62 1.17 - - - - -
Total current Liab. 35.11 28.48 47.86 55.27 59.47 66.15 76.63
Total Equity & Liab. 255.96 275.72 366.90 392.89 431.04 499.10 559.96
Assets
Non-Current Assets
Fixed Assets
Tangible fixed Assets 118.29 118.59 144.84 142.22 152.09 168.37 192.28
G/W On Consolidation - - - - - - -
Non-current Investment 2.96 2.96 2.91 2.91 2.91 2.91 2.91
Long term L&A 0.63 9.72 15.55 16.33 18.05 19.96 22.07
Other Non current Ass. 2.20 2.05 1.67 1.02 1.02 1.02 1.02
Deferred tax receiv. - - - - - - -
Total Non-Current Ass. 124.08 133.32 164.97 162.48 174.07 192.27 218.28
Current Assets
Current Investments 5.00 - 87.97 117.73 112.20 109.60 115.30
Inventories 24.48 44.09 44.00 41.68 52.16 65.14 74.73
Trade Receivables 9.24 26.79 38.68 38.13 50.08 73.79 78.23
Cash & cash Equi. 48.86 57.89 13.73 13.15 22.27 35.00 48.58
Short Term L&A 21.77 11.70 15.74 15.29 15.00 15.63 16.05
Other current Assets 22.53 1.93 1.81 4.41 6.26 7.63 8.76
Total current Assets 131.88 142.40 201.93 230.39 257.97 306.79 341.65
Total Assets 255.96 275.72 366.90 392.89 432.04 499.10 559.96
Cash & cash equivalents 48.86 57.89 13.73 13.15 22.27 35.00 48.58
Other int. bearing assets 7.96 2.96 90.88 120.64 115.11 112.51 118.21
Interest-bearing debt 27.63 10.31 68.07 62.49 59.79 59.60 64.72
Net interest-bearing debt - - - - - - -
Net gearing (%) - - - - - - -
Investments
Tangible assets
Gross capex (47.86) (26.04) (45.03) (20.79) (31.30) (38.17) (46.71)
Sale of fixed assets 0.74 1.76 0.61 1.15 - - -
Net capex (47.12) (24.28) (44.42) (19.64) (31.30) (38.17) (46.71)
Depreciation tangibles (9.30) (18.62) (21.70) (20.33) (21.43) (21.88) (22.80)
Note:- The figures shown in the brackets means NEGATIVE.
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RATIO ANALYSIS
Particulars 201403 201503 201603 201703 2018E 2019E 2020E
Return on assets - 5.86% 9.13% 8.44% 9.93% 13.53% 14.93%
Return on equity - 7.28% 12.41% 12.01% 13.49% 17.72% 19.17%
ROCE - 4.32% 9.32% 7.44% 10.43% 14.50% 17.06%
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Disclosures :
1) Business Activity :
Rudra Shares & Stock Brokers Limited is engaged in the business of providing broking services & distribution of
various financial products. RUDRA is also registered as a Research Analyst under SEBI(Research Analyst)
Regulations, 2014. SEBI Reg. No. INH100002524.
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agencies against RUDRA and its Directors. Pursuant to SEBI inspection of books and records of Rudra, as a Stock
Broker, SEBI has not issued any Administrative warning to Rudra.
The Research report is issued to the registered clients. The Research Report is based on the facts, figures and
information that are considered true, correct and reliable. The information is obtained from publicly available media
or other sources believed to be reliable. The report is prepared solely for informational purpose and does not
constitute an offer document or solicitation to buy or sell or subscribe for securities or other financial instruments
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financial interest in the subject company.
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company or third party in connection with the research report .
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Yes/No
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past twelve months.
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Disclaimers:
This Research Report (hereinafter called report) has been prepared and presented by RUDRA SHARES & STOCK BROKERS
LIMITED, which does not constitute any offer or advice to sell or does solicitation to buy any securities. The information presented in
this report, are for the intended recipients only. Further, the intended recipients are advised to exercise restraint in placing any
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contained herein nor assumes any responsibility in relation to losses arising from the errors of fact, opinion or the dependence
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