Sunil Agro Foods Limited(530953) : A small cap FMCG company available cheap at CMP of Rs21 one year Target Rs 30

About Company: Sunil Agro Foods Limited is in the manufacture of Wheat products namely Maida (Wheat Flour), Sooji (Semolina), Atta (Wheat Resultant Atta), Whole Wheat Atta and Bran (Wheat Bran) extracted out of Wheat. The marketing network spread all over south.  Sound tie up in marketing, experienced promoters, locational advantage (With infrastructure facilities)It also manufacturing and packing  for General mills making Pillsburry Chakk iAtta,Multi Grain Atta, Dried& Roasted Rava.

Sunil Agro is a well established and has been in existence for the last 17 years. The Company is marketing their product under the brand name ‘Sunil’.

Customers: The Company’s clients include names  like M/s. Britannia Industries Limited, MTR Foods Limited, ITC Foods Limited, TTK Health Care Limited, Nilgiris, Goodbread, SPV Foods, Polykrop and other Bakeries, Confectioneries and many big, small wholesale customers.

Financials:

	2015	2014	2013	2012	2011
Revenue(Crores)	104.42	135.86	106.84	77.69	76.29
Other Income	1.06	0.73	0.59	0.42	0.27
Total Income	105.48	136.59	107.43	78.11	76.56
Expenditure	-101.9	-132.83	-103.67	-75.05	-74.42
Interest	-1.59	-1.47	-1.38	-1.4	-1.08
PBDT	1.99	2.29	2.38	1.67	1.07
Depreciation	-0.98	-0.79	-0.7	-0.63	-0.47
PBT	1.01	1.5	1.68	1.03	0.6
Tax	-0.16	-0.43	-0.59	-0.3	-0.12
Net Profit	0.85	1.07	1.08	0.73	0.49
Equity	3	3	3	3	3
EPS	2.81	3.57	3.61	2.44	1.61
CEPS	6.08	6.21	5.94	4.55	--
OPM %	3.43	2.77	3.52	3.94	2.81
NPM %	0.81	0.79	1.01	0.94	0.64
Dividend	0.5%(E)	0.50%	0.50%	0	0

Company has started paying dividend from 2013 onwards on consistent basis. FMCG companies normally enjoy higher PE multiple due to rising demand and assured business. At CMP od Rs 21 stock is avavailaible at PE multiple of 7 which is comparatively low and going forward with improved financial performance t can achieve a revenue of Rs 115 in 2015-16 with 0.9 -1% NP margin can achieve NP of 1 crores resulting in EPS of 3.AT a forward multiple of 10 share can easily touch Rs 30 in a year’s time. Considering expected dividend of .050%  in Aug-2015 and Aug-2016 investor should expect 2 dividends if investment is done from 1 year prospective that would result in dividend iyield of 5% apart from target capital appreciation of 50% from current level of Rs 20.So there is scope of 55% return if share is bought at CMP of Rs 21. 

Long term investor may buy this small cap undervalued gem for one year target of Rs 30 .