ARIES AGRO

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THIS SCRIP WAS EARLIER RECOMMENDED ON MARCH 12,2010 AT A PRICE OF RS.108/-.NOW IT IS QUOTING AT RS 122/-.I FEELS EVEN AT CURRENT LEVEL IT IS WORTH FOR MEDIUM TERM INVESTMENT,HENCE....
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Mounting food inflation is a serious threat to the economies worldwide. But some companies are benefiting from this situation .All governments are forced to take steps to improve food production using scientific methods and most modern techniques. Companies from the agri- related sectors are the major beneficiaries of government’s such efforts.In India micro irrigation sector is getting very big boost in every budget .Even though fertilizer companies are also important in this perspective ,government control on fertilizer prices limiting their potential. Along with fertilizers, micronutrients are also gaining acceptance among Indian farmers. Moreover micronutrients are not subject to the regulatory constraints that fertilizers face. The micronutrients business has considerable potential in the Indian context. Factors such as low yields of major food grains and horticultural crops, high soil alkalinity and intensive cultivation are the key demand drivers for micronutrients. The market for micronutrients such as zinc, iron and copper in India, is expected to double over the next two decades. ARIES AGRO is the largest player in micronutrients from the organised sector in India. The other two players in this sector(from organized space) is Ranade Nutrients and Karnataka Agrochem ,but both are only regional players. Aries has 65 branded products coming from six manufacturing units in India , one each at Mumbai, Kolkatta, Hyderabad , Bangalore ,Ahmedabad ,Lucknow and one new factory in UAE which is mainly for catering middle east region and North Africa .Aries is in the process of launching new products which include Natural amino acid chelates,Boidegradable chelates and Bio-degradable plant protection products. With the inauguration of its Ahmedabad factory company entered into a new space of Bio fertilizers too. Company’s largest distribution network of 5500 distributors and 76500 (seventy six thousand five hundred) retail outlets across India is the main attraction for a rural centric business like this. In future company can easily roll out allied products throughout this network without much marketing efforts. In addition to this distribution points company has added a fleet of 100 rural retail vehicles called ‘Krishi Vinjan Vahan ‘ in 9 states in India.This is mainly for improving company’s rural reach and advisory services.

Financial Perfomance

For the nine month ended in December 2009 Aries posted a net profit of Rs.10 crore which is more than 300 % increase from the last full year figure(3.1 crore).Company is expected to post an EPS of Rs.12/- for this financial year and an EPS above Rs.20 for FY 2011. Going forward big corporates are expected to coming into the farming sector of India in a big way. This will surely improve the prospects of the products of companies like Aries along with the initiatives of governments to increase food production.