SUKHJIT STARCH AND CHEMICALS - RESULT UPDATE

I have recommended  Sukhjit Starch and Chemicals HERE on 28th June 2010 @ Rs.169/-.Currently it is trading @ Rs.250/- Company has declared excellent June qtr result as follows :




                             JUNE QTR 2010        JUNE QTR 2009

TURNOVER           79 Cr                   58 Cr

NET PROFIT         8.5 Cr                     1.8 Cr


EPS                      Rs.11.6/-                  Rs.2.45 /-




One Can HOLD it for long term ,considering the improving  prospects of the industry and chances of a reduction in raw material cost going forward

SUKHJIT STARCH AND CHEMICALS - BUY

Sukhjit starch and chemicals is one of the largest

manufacturer of starch and starch derivatives in 

India. Company has four units one each in Punjab,

Andhhra Pradesh,West Bengal and Himachal. 

Company’s products are widely used in industries

like Confectionery, Bakery ,Preserved food,

Baby foods,Ice creams..etc. All of these

industries are closely related with direct

consumer spending. Company is a preferred

supplier of well known firms like Wrigley

India Ltd., Dabur India Ltd., Perfetti

India Ltd.,Godrej,  Parle, and  Cadbury.

Citing the vast scope in consumer industries,

company is now planning to start another

Greenfield plant near the existing site at

West Bengal with a capital outlay of Rs.50 Cr.

Entire amount for the expansion will be funded

through term loans and internal accruals.

For the last financial year company posted a

turnover of Rs.259 Cr and a net profit of

Rs.15 Cr with an EPS of Rs.20/-. Sukhjit also

declared a dividend of 60% for its Rs.10/-

FV shares.It is expected to perform even

better in coming years. Open market purchase of

shares by promoters are also a positive factor.

A decent medium to long term BUY at current level

of Rs.169/- which is at a price earning multiple

of 8.5. Keep an eye on maize prices which is the

raw material of the company and prone to

wild fluctuations  due to monsoon effect.