Market Cap.: ₹ 443.55 Cr.

Current Price: ₹ 616.90

Book Value: ₹ 131.28

Stock P/E: 25.55

Dividend Yield: 0.20%

Face Value: ₹ 10.00

Lot of Cash .

Debt is decreasing

Company is presently trading at 25PE TTM. This looks higher.

Vadilal is India’s second-largest ice-cream brand by sales with around 150 flavours sold in 300 packs and forms.

Vadilal Industries has 2 broad business segments: ice-cream and food processing.

Ice-cream segment contributes 87% of Vadilal’s annual revenue. Vadilal has strong ice-cream brands like Badabite, Flingo & Gourmet. Vadilal’s strategy is to launch innovative products to maintain leadership and expand in mass premium products. Mass premium products have better margins and are growing a faster pace. This segment, however, remains only a small portion of overall ice-cream segment.

Vadilal has strong backward integration with the farmer community for milk procurement for ice creams at its plant near Ahmedabad. Leveraging this network, Vadilal has recently forayed in the flavoured milk segment under the brand name “Power Sip”.

Vadilal processed food division has been aggressively focusing on widening product range i.e vegetables, Indian breads, snacks, curries & paneer. Vadilal supplies ‘malai paneer’ to Gulf and USA.

Vadilal intends to increase it’s dairy products portfolio by introducing Ghee, Shreekhand and other milk based products. Processed food makes up 12.5% of the overall revenue but is a loss making segment.

Promoter group holds around 65% of the equity shares at the end of FY2016. Large shareholding by promoters is a good sign.

Disputes in promoter’s family:

Vadilal’s debt to equity is on the higher side ~1.8.

Vadilal’s earning should grow at signifiant pace (20-25%) to justify any price appreciation from current levels.

Final Verdict More correction needed by market. Industry is good business model is good. Keep on radar.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s