AgroTech Foods once recommended @ Rs.327/- on November 6,2010.This is NOT a BUY purely on conventional valuation parameters like P/E.In my old posting I clearly mentioned that the attitude of foreign management after the exit of ITC from this company will be the crucial point to watch.Based on some of the recent developments, I strongly feels that the parent company ConAgra Foods is now fully committed and trying their level best to take Agrotech Foods to the next stage of growth.In November 2011,foreign promoter hiked their stake to 52 % by purchasing ITC's remaining stake at a huge premium ( @ Rs.580) to the then prevailing market price.Last week AgroTech announced its plans to start four new manufacturing facilities - 3 in India and 1 in Bangladesh in next three years at a cost of Rs.100 Cr.This step is a clear indication for company's plans to concentrate in growing Indian and other Asian markets going forward.Company's efforts to transform from a commodity player to a food company is also started to bring results and it is evident from the margins posted in latest December quarter.It is expected to introduce many of the parent's brands in India in next few years. This MNC associate may not be cheap at CMP of Rs.450/- as I mentioned above , but this premium will continue even in future considering its growth prospects,debt free balance sheet,parent company's status and its brand value..etc. It is a stock to include in your core portfolio with a long term view .
For the old posting Click HERE
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