Sukhjit Starch
71 year old Sukhjit Starch & Chemicals is one of India’s oldest and the country’s third largest manufacture of maize starch and starch derivatives, with a 10% market share. For Q3FY15, the company clocked revenue of Rs. 134 crore and earned EBITDA of Rs. 18 crore (EBITDA margin of 13.8%) and net profit of Rs. 7.85 crore (net margin of 5.9%).
For nine months ended 31st December 2014, Sukhjit clocked revenue of Rs. 403 crore, while EBITDA jumped to Rs. 51 crore (equal to FY14’s Rs 52 crore), expanding EBITDA margin to 12.7%. Lower raw material costs aided margins in the current year. 9MFY15 net margins ballooned to 4.9% (up from 3.2% in FY14) as net profit surged to Rs. 20 crore. As at 31st December 2014, company had reserves of Rs. 194 crore, resulting in net worth of Rs. 201 crore and BVPS of Rs. 272. Thus share is currently available at near its book value, making it an attractive buy. Total debt is Rs. 189 crore and cash and equivalents are at Rs. 25 crore, indicating net debt of about Rs. 165 crore.