ADF FOODS - BUY

                                                                                    

                                                                                                                                                                                                                              
ADF Foods is a manufacturer of processed food items like pickles,pastes, chutneys, ready-to-eat curries, frozen parathas, frozen snacks and frozen vegetables ..etc.
Company having two production facilities - one in Maharashtra and other in Gujarat. 95 % of the total income of the company is currently from  exports.  Its popular brands includes 'ASHOKA' ( ready-to-eat curries (Heat & Eat), Frozen Foods (Indian Breads & Snacks), pickles, condiment pastes, mango pulp/slices, chutneys, pappadums, IQF (Individually Quick Frozen) ready-to-cook vegetables, and Microwaveable rice ) 'CAMEL' ( Curry powder and Pickles) 'AEROPLANE'(Chutney,currey powder,Pickles,Flavored water) 'TRULY INDIAN'(cooking sauces,cooking pastes, canned food items,ready to eat curries..etc) 'SOUL' ( Ready to eat curries,pickles,mango chutney) .Among these brands ,'SOUL' is exclusively launched in Indian market in last financial year and got good response.Company is adding new countries in its export list every year and also planning to increase the local sale in the years to come.Changing life style of Indians are now favoring ready to eat products and the sales graph of these type products are climbing very well.Such a change in the attitude of public will surely help the companies like ADF.Now company is aiming a turnover of Rs.500 Cr in 5 years.ADF is planning to introduce international cuisine in ready-to-eat formats under the 'SOUL' brand .It is planning  a capex of around Rs.45 Cr to expand production and distribution facilities in a phased manner in next few years. To reduce the cost pressure of its raw materials company have started contract farming recently. Earlier there was some disputes among family members about the brand names of the company which affected its growth earlier ,but it resolved now. Company's recent efforts to introduce more products under new brands are expected to bring more business.Active buying of shares from open market by promoters are also a confidence booster. For the FY 2011 ,company posted a turnover of Rs.112 Cr and a net profit of Rs.18 Cr .On an equity base of Rs.20 Cr ,annualised EPS is close to Rs.9/- Company also having an uninterrupted dividend record for the past five years. It is a fact that its share price in moving in a narrow range for the past many months, but there is every chance for a decent re rating going forward from CMP of Rs.60/- level