Buy Kwality Dairy; target of Rs 38: Firstcall Research

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26 Aug, 2025 12:21

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Firstcall Research is bullish on Kwality Dairy (India) and has recommended buy rating on the stock with a target of Rs 38 in its December 07, 2012 research report.
 
“Kwality Dairy (India) Ltd India's Premier Dairy Foods Company focuses on building leadership positions in branded and value added markets across the dairy sector is instrumental in providing dairy products at par with international standards at a very low input cost. Incorporated in the year 1992,is growing at a fast pace with a turnover of 1054 crore in 2009-10 & growth of 81 percent in the current financial year. Kwality Dairy India Ltd has introduced Pure Ghee under the brand name- Dairy Best. Another Pure Ghee variant exclusively made from cow’s fresh milk is also available. The product has made a commendable impact in the Indian market and made its presence felt in Delhi, Punjab, Rajasthan, and Haryana etc. The company is ISO 22000:2005 Certified Company and the skimmed milk powder is certified with ISI by Bureau of Indian Standards. Also Pure Ghee is certified by Agmark by Directorate of Marketing and Inspection, Ministry of Agriculture, Government of India. It is poised to revolutionize the Dairy Industry with new range of innovative products with quality, integrity and technology being the hallmark of growth. Ensuring the dairy processes result in the best quality products also meet with functional and nutritional needs of the customer.”
 
“KDIL has obtained the design and key equipment from Alfa Laval India Ltd (Tetra Pack Group) with design back up from APV Anhydro Pasilac AS Denmark. The company organizes various animal health and fertility camps and village level meetings on an ongoing basis to discuss the requirements of the farmers. Further, these camps also educate the farmers on the general improvement in the quality of life and hygienic living standards, other social issues are also subsequently addressed. The milk procurement team broadly advises and provides guidelines to the participating farmers. The milk is procured through milk collection centers situated at Fatehabad and Rania. The quantity of milk procured from each centre on an average is 25,000 liters per day. Each centre covers about 100 villages spread over 8-10 procurement routes. Every village level milk collection point has 80-90 farmers pouring milk which generates avenues for earning livelihood for about 8000 farmers, thus bringing economic upsurge in the area.”
 
“Kwality Dairy (India) Ltd, India's Premier Dairy Foods Company focuses on building leadership positions in branded & value added markets across the dairy sector, reported its financial results for the quarter ended 30th Sep, 2012. The Second quarter witnesses a healthy increase in overall sales as well as profitability of the company. The company’s net profit jumps to Rs.268.44 million against Rs.161.98 million in the corresponding quarter ending of previous year, an increase of 65.72%. Revenue for the quarter rose 72.88% to Rs.8893.15 million from Rs.5144.13 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.1.32 a share during the quarter, registering 65.72% increase over previous year period. Profit before interest, depreciation and tax is Rs.549.17 millions as against Rs.388.51 millions in the corresponding period of the previous year.”
 
“At the current market price of Rs 33, the stock P/E ratio is at 4.92 x FY13E and 3.75 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.6.70 and Rs.8.80 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 37% and 56% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 5.71 x for FY13E and 4.72 x for FY14E. Price to Book Value of the stock is expected to be at 2.12 x and 1.36 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 38 for medium to long term investment,” says Firstcall Research report.

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