Intense competition in the snacks industry, elevated valuation and the vagaries of the raw material costs make us wary about listed entities in this space.
In the consumption space, it makes a credible investment rationale if one looks at the alternatives that are better priced and offering higher return on equity.
Indian snacks industry is a secular growth story aided by demographics and changing food habits. There are a limited number of players riding on this theme and Prataap Snacks appears to be in the “right place at the right time” but not quite at the right price.
Firstcall is bullish on DFM Foods has recommended buy rating on the stock with a target price of Rs 1140 in its research report dated March 15, 2016.