Narmada Gelatine is a 50 year old company manufacturing pharma and food grade gelatine.Company started its operations as Leiner-Knit Gelatin Co in 1961 and now controlled by M R Chhabria led Jumbo group.Company is manufacturing Gelatine ,ossein and di-calcium phospate.In pharma sector , a major portion of gelatine is used for manufacturing the outer cover of capsules. Food and pharma grade gelatine consists about 60 % of the total gelatine consumption of the world .The main raw material of gelatine is the bone of animals.Because of pollution control concerns and difficulty to obtain raw materials capacity addition is very slow in this sector . On the other side demand is rapidly increasing from pharma and food sector.Narmada having a good client list and showing steady growth over the past few years. Company is a low debt one with too. It is expected to improve the cash flow in the coming years.For the FY 2011 , company posted a turnover of Rs.91 Cr and a net profit close to Rs.10 Cr .Full year EPS is Rs.23.50.Promoters holding in this company is 75 % and company is hiking the dividend payout every year in last four years.Earlier Jumbo group have some plans to sell this company when it was in trouble.But there is no updates in this matter in recent times. Even if it happens ,considering the strong position of the company big foreign players may also interested and may fetch better valuation .Currently it is trading around Rs.95/- at a P/E multiple of just 4 which is really a valuepick
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