I have bought 500 shares of IFB Agro In­dus­tries Lim­ited at ₹392. Should I hold it or sell it off? - Ankush Mun­dra

Dalal Street Investment Journal - - QUERYBOARD -

IFB Agro In­dus­tries Lim­ited man­u­fac­tures al­co­hol, en­gages in bot­tling of branded al­co­holic bev­er­ages, be­sides pro­cessed and packed ma­rine foods for both do­mes­tic and for­eign mar­kets. The com­pany op­er­ates in seg­ments in­clud­ing spirit, liquor and spir­i­tu­ous bev­er­ages, as well as ma­rine prod­ucts. The com­pany’s spirit, liquor and spir­i­tu­ous bev­er­ages seg­ment man­u­fac­tures ex­tra neu­tral al­co­hol (ENA), rec­ti­fied spirit and In­dian made In­dian liquor.

The com­pany’s ma­rine re­lated busi­ness en­gages in the ma­rine prod­uct pro­cess­ing for sale in ex­port and do­mes­tic mar­kets and ma­rine feed trad­ing as well. The com­pany has a grain-based dis­tillery at Noor­pur in West Ben­gal with a ca­pac­ity of about 120,000 litres ENA per day.

On the fi­nan­cial front, the rev­enue of IFB Agro In­dus­tries rose 23.01 per cent to ₹336.34 crore in the first quar­ter of FY18 from ₹273.43 crore in the cor­re­spond­ing quar­ter of FY17. How­ever, the com­pany’s PBIDT de­creased 24.83 per cent to ₹12.87 crore in Q1FY18 on a year-on-year ba­sis.

The com­pany’s profit after tax stood at ₹7.27 crore for Q1FY18, down by 28.50 per cent from ₹10.17 crore in Q1FY17.

On an an­nual ba­sis, the com­pany’s rev­enue in­creased 32.10 per cent to ₹807.05 crore in FY17 from ₹610.93 crore in the pre­vi­ous fis­cal. The PBDIT of the com­pany fell 5.95 per cent to ₹49.34 crore for FY2017 on a year-on-year ba­sis. The com­pany’s profit after tax in­creased 9.31 per cent to ₹32.06 crore in FY17 on a yearly ba­sis.

The com­pany main­tained a TTM PE of 12.21x, whereas its peers such as GRM Over­seas stood at 7.53x and KSE at 17.31x, while the in­dus­try’s TTM PE stood at 47.97x. The stock is likely to trade lower, hence we rec­om­mend our reader-in­vestors to Book Profit.

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