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This food colour company’s business model makeover and capex plans need a close watch

In the near term, an improving product mix, lower share of trading business and backward integration are expected to improve earnings for Vidhi Specialty

October 01, 2020 / 02:19 PM IST
This food colour company’s business model makeover and capex plans need a close watch

PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook

Highlights - Recent operating performance aided by a shift in its business model - Capex plan can potentially increase sales close to 3x; Environment clearance awaited - Lean balance sheet provides scope to fund capex, if required - Valuation doesn’t capture medium term opportunity due to capex Vidhi Specialty Food Ingredients (CMP: Rs 122, Market Cap: Rs 612 crore) has had a strong transformation in operational performance in last few years. Earlier, a large share of revenue came from the trading business. Now its business largely depends on...

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