VIMAL OIL AND FOODS is one of the largest
listed companies in edible oil sector. It is the
flagship company of VIMAL group based in
Gujarat .Its products list includes cottonseed
oil, groundnut oil, mustard oil, Soyabean oil,
Sunflower oil and Corn oil. Company having
a strong marketing network with 50 depots ,
1500 distributors and presence in 5 lac retail
outlets across 21 states in India . Company is
selling its products under the brand name
‘VIMAL’ and ‘LIPI’ . Company has also
entered in the space of Table Margarine with
‘VImal Lite’ .Another company producing
margarine is Zydus Wellness . Companies
from the edible oil and food space are going
through a re rating in Indian stock Market.
Another comparable company is JVL Agro
which is in the same space has appreciated
many fold in the recent past. Vimal
posted a turnover of Rs.622 Cr and a net profit
of Rs.3 Cr in last full year.(This is a low margin
high volume business) . But ,for the three months
ended June qtr alone ,company has improved its
performance and posted an EPS of Rs.5.24 .
When we look into the share holding pattern ,
in the first instance we may feel that the promoter
holding is low as 19% .But the entire share
holding put under the large public category is held
by the associated of promoters itself ,thus it takes
to 59%. Moreover , company is now going to
issue 70 lac shares on pref.basis to the promoters,
which an an indication of their confidence in the
company .Using this fund company is planning to
add more value added products and improve its
marketing network. All together , it is a risk less
BUY at CMP around RS.60/-
great pick i own it the big problem is that its very illiquid
ReplyDeletevlaueji wht is your opinion on suraj diamonds
oops not so illiquid now it was when i bought it though
ReplyDeletedear value
ReplyDeleteI UNDERSTAND ,no great investors have timed market but kindly express ur views on overall MARKET condition. because if we go for correction at this time smallcaps tend to correct drastically AND then long waiting Coming months could be different from last 5 months
hi valuepick, the proposal to increase equity by alloting shares to promoters will cause big equity dilution also. Do you think the earnings in future will jump big to serve the higher equity?
ReplyDeleteDear Friend
ReplyDeleteIt is very difficult to time the market,if anyone feels the current level of a scrip reflecting a higher price , compared with its anticipated future growth,better to sell and wait for correction.
Dear Sandep
ReplyDeleteI am expecting reasonable growth in sales and even better performance in margin to justify the expanded equity going forward.
The shareholding pattern doesn't look too good...promoters stake has been steadily coming down and their current holding is just 19%.
ReplyDeleteInvestWizard
ReplyDeleteDon't comment after reading the name of company only ,Read the text and then comment.
hi valuepick, will the increase in promoter stake require an open offer also like Religare?
ReplyDeleteToday i read one article in myiris.com that CRISIL has given negative rating to VIMAL. How for will it affects its business and share price in medium to long term?
ReplyDeleteHi Live fms
ReplyDeleteRead the report in full.In the same reportCRISIL said that the situation will improve after the proposed fund infusion by promoters .Moreover it will not affect the company in no way ,since they have no plan to raise fund through debt in near future.
why it is falling now?? why proce is falling when are promoters are buying?
ReplyDeleteHi, Please tell me whether Poona Dal & Oil is a better investment compared to Vimal Oil & Foods for long term ?
ReplyDelete