Sunday, September 19, 2010


In a country like India with huge population and increasing
disposable income , scope of companies from food processing
sector is very vast,especially those with good brands.But,
unfortunately many such brands are owned by unlisted
players or high priced MNC’s . Only very few companies
developed niche market and established their own brands
and growing handsomely. DFM Foods is one of such company
which is a dominant regional market player in snacks foods
sector. DFM is promoted by Delhi Flour Mills and had two
divisions till last year – Wheat storage Business and Snack
Foods Business. From last year onwards DFM discontinued
the low margin wheat storage business and now concentrating
only in snack foods division.Its brands  CRAX,NATKHAT,
WIZZ ..etc are popular in northern part of India.Last year
company expanded its capacity at a cost of Rs.13 Crore and
due to huge demand for its products now again planning to
expand the capacity further. Company is also taking steps to
make it a Pan India brand in few years from now.In last
financial year DFM’s snack foods division shows a growth
of 35% in turnover(Total turnover was less due to
discontinuation of wheat storage business).Net profit also
sharply improved from Rs.1.99 Cr to Rs.4.21 Cr backed by
better margins from snack foods division. In the first
qtr of this financial year(June qtr) company shows an increase
of 50% in its sales from Rs.13 Cr to Rs.20 Cr .With increasing
urbanization and changing life styles,demand for snacks
foods are expected to rise sharply and on the other side the
expected record production of wheat will reduce the pressure
of raw material cost which will help the company to record
better performance going forward. Earlier, company had an
image of a wheat trader and enjoyed only low valuation due
to the image of a trading company. But now it is a pure
FMCG/food processing like play and it should be re-rated
accordingly. There is good scope for appreciation from
current level of Rs.48/- 
* I have earlier mentioned DFM in MMB in Nov.2009


  1. dear sir,
    many thanks for your review of all scrips. what do you suggest about trend electronics ( formerly videocon communication)


  2. Dear Gopi
    Valuation vise it may be cheap and may move a bit.But generally I am skeptical on Videocon group

  3. I have a suggestion for you. I would suggest you to use some other template which is simple and with white background for your blog. I love your blog and like to read it during office hrs ;) but with such bright color combination its very flashy so i dont.


  4. nipi, please work in office and read this at home.
    no Kaamchori please.

  5. Dear value-picks,
    Thanks for all the stock recommendatons.
    Your take on MIC Electronics? Valuation wise it looks cheap

  6. Dear Value pick,

    How is Southern Ispat & Energy at current level?


  7. sir whats your call on indswift and bpl

  8. Dear sir what is ur opinion abt veer energy



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