Company announced its quarterly results on 06 Aug'14, net profit of Flex Foods rose 102.38% to Rs 4.25 crore in the quarter ended June 2014 as against Rs 2.10 crore during the previous quarter ended June 2013. Sales rose 18.29% to Rs 17.66 crore in the quarter ended June 2014 as against Rs 14.93 crore during the previous quarter ended June 2013. We suggest our members to continue to hold Flex Foods Ltd in their portfolio.
The Company is engaged in the business of agro based value added food products catering to the international markets mainly in Europe, USA, Canada & Australia. The company started its commercial operations in 1992 by establishing an 100% EOU for vacuum freeze dried vegetables mainly mushroom and culinary herbs with a total processing capacity of 2000 MTs per annum.
FFL is in the business for last more than one decade and has been selling its products mainly in US and European market through it renowned and reputed distribution channels.
List of countries where company export :
The processing infrastructure includes the most modern plant equipments from leading technology providers i.e. M/s NIROA/s , Denmark ; M/s NON, Holland; M/s BINDER, Germany & EUROTEK, UK along with those from the leading Indian companies. The plant can process upto 20000 MTs of mushrooms, herbs, fruits & vegetables per annum in the form of freezedried, frozen, IQF, air-dried and canned products. All the process steps starting from the reciept of raw materials till final packaging of the product , are under strict quality environment & hygienic conditions to achieve the highest level of microbiological & phytosanitary standards.
The facilities have been certified for KOSHER, Global Standard for Food Safety (formely British Retail Consortium(BRC)-issue 5th January 2005 at Grade-A) and HACCP complaince.
The technical human resource comprises of highly skilled professional experts in the field of Food Technology, Total Quality Management, Engineering & Agro- Sciences from leading institutes supported by a highly skilled & trained staff and allied manpower.
FFL is a single point source of supplier of Frozen / IQF, Air Dried as well as Freeze Dried products to the customers as per their requirements.
1. Debt to equity ratio of Flex Foods stands at 0.27, promoters share holding in the company is 59%, stock is trading at 0.71 times of its book value and company is paying dividend of Rs. 2 since last 6 years, which at current market prices of Rs. 32.75 works out to an attractive dividend yield of 6.1% (tax free on the hands of investors). This consistent dividend payouts makes the stock attractive over bank fixed deposits for long term investors.
2. Company revenue growth is merely 5.4% in last 5 years, however operating profit margins of the company have improved to 22.2% in first 3 quarter of FY 2014 compared to OPM of 18%, 17.3% and 17.6% in FY 2013, FY 2012 and FY 2011 respectively.
3. Company generates more than 60% of its revenue from exports and any depreciation of rupee from current levels is expected to improve company's performance.
4. Moreover, Flex Foods is going through expansion of its manufacturing facility with an investment of Rs. 12 crores and hence we can expect better revenue growth with higher net profits in coming years. Company is trading at trailing PE ratio of 5 and considering increase in its revenue from ongoing expansion, Flex Foods is a good investment opportunity for long term investors.
We suggest you to invest in Flex Foods Ltd at CMP of Rs. 32.75 for a target of Rs. 60 over a period of 12 to 24 month.
We would like to inform our readers that Hidden Gem - Aug'14 stock research report / recommendation is yet not published by our team and will be released on 31st Aug'14.
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Team - Saral Gyan.