Angel Broking's report on IFB Agro Industries
"IFB is a major player in the marine business (with prawns constituting 90 percent of the business) in West Bengal (WB) with presence in domestic as well as export markets. The company also has a tie up with Thailand's C.P. Group for supply of feed to farmers. We believe there is huge potential for the company's marine business, given the company's strong customer base, rising demand for frozen sea food, and improvement in overall global economic growth outlook. Further, rupee depreciation will boost revenue from export markets."
Valuation: "IFB's preferential allotment of 3,62,000 shares at a price of Rs 188 per share(subject to shareholders' approval) is an indicator of the promoter's confidence in the company. As on 1HFY2014, IFB holds cash and cash equivalent of Rs 31cr which is ~17 percent of the current market capitalization. At the current levels, the stock is trading at a PE of 4.9x its FY2015E earnings and P/BV of 0.8x for FY2015E. We recommend a Buy rating on the stock with a target price of Rs 249 based on a target PE of 6x for FY2015E," says Angel Broking research report.
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