Agro Tech Foods Ltd - 500215

Name of Company	Agro Tech Foods Ltd
BSE Code	500215
NSE Code	ATFL
ICICI Code
Established
My Take	So-So
Headquarters	Secundrabad
Promoters	Some MNC – Not sure if it is linked to ConAgra. ITC has sold out big stake and is no longer the promoter.
Story	Iconic brand Sundrop, which has very good market share as well as pricing power. Associate of ConAgra – so has licenses to sell ACT II and eventually for other brands.
Sector	Foods
Sub-sector	Sunflower oils, ACT II popcorn are main brands.
Website	http://www.atfoods.com/
Positives	Rakesh Jhunjhunwala holds 8% along with Rekha Jhunjhunwala. Promoters now hold 48% stake, none pledged. NPMs have been consistently rising to over 3% from 0.5% in FY06. This is a zero debt company and as oil companies are low margin, zero debt help keeps the margin at 3-4%.
Negatives	Oil businesses are low margin businesses. Revenue used to be higher in FY06 compared to FY10 (937 Cr compared to 652 Cr).
Peers
News
Price @ blogged	363.30(30-Dec-10)
Cost of company	885 Cr for a 25 Cr FY10 NP translates to 35 times. Other than over-hyped Rakesh’s investment, nothing explains this cost. Zero Debt and 126 Cr reserves also does not help valuations much.

December 2010 - Monthly B Group Losers

Company	Prev	Now	% Chg	Comments
Sadbhav Engineering	1,390.70	120.55	-91.33	Stock Split from 10 to 1
Surya Pharmaceutical	279.45	28.8	-89.69	Stock Split from 10 to 1
Tribhuvan Housin	41.35	4.45	-89.24	Still too high PE's, no real revenues -people just play with these stocks
Balkrishna Ind.	750	129	-82.8	Stock Split from 10 to 2
ACIL Cotton Industri	21	4	-80.95	Promoters have exited this company, run away
Weizmann	79.5	20.55	-74.15	2.5% dividend at price. flat revenues. 7-12% NPMs. At 6.5 PE currently. Check scheme of arrangement if this is a valueable proposition
Comfort Intech	13.81	3.62	-73.79	Finance company with very less information. Heavily valued even at 115 Cr
Shree Ashtavinayak C	36.65	9.75	-73.4	Too costly even at 800 Cr
SVC Resources	301.35	81.2	-73.05	PE of 100 is really costly. Don’t know why it fell suddenly
Midfield Industries	409.9	111.25	-72.86	Listed in 2010 and going to new lows every month, still costly at 40 times
Ranklin Solutions L	93.85	26.45	-71.82	less than 2 times PE, 25% promoter shareholding(15% pledged, so only 10% is ideally their stake). 16% NPM
Bheema Cements Ltd.	114.45	32.65	-71.47	bad Sep results have pushed this down. Still can be bought at 25. promoters hold 72%.
Spectacle Infotek Lt	162.05	50.35	-68.93	Too costly even at 260 Cr
Money Matters Financ	382.55	137.05	-64.17	Fraud hit stock price hard
Sampada Chemical	460.25	165.35	-64.07	with such low NPM, not even a worthy business. Too costly
Urja Global	136.85	49.45	-63.87	with such low NPM, not even a worthy business. Too costly
Scope Industries	109	41.45	-61.97	Is this company even there?
Vaghani Techno-Build	62.75	24.75	-60.56	8 times FY10 NP is good value, FY11 seems better - buy
NCL Research	89.3	37.65	-57.84	with such low NPM, not even a worthy business. Too costly
Vertex Securitie	334.75	141.45	-57.74	Too costly. Unbelievable, unreliable business
Aishwarya Telecom Lt	25.7	11.05	-57	Last 2 qtrs are bad. Not sure of forward earnings
Arrow Securities	79	34.35	-56.52	with such low NPM, not even a worthy business. Too costly
Nalin Lease Fina	51.05	22.75	-55.44	Good NPMs, low promoter holding
Mansi Finance	42.95	19.75	-54.02	Don’t believe stocks that make no revenues but make huge profits
Hi Tech Gears	256.75	120.3	-53.15	1:1 bonus brought down. Better Fy11. Kapuria family holds 55% (No pledge)
Sujana Metal Product	34.3	16.1	-53.06	Steel company with no dividends and insider trading. Avoid
Powersoft Global Sol	20.75	9.85	-52.53	Bonus shares 1:1, not worthy at even lower prices
Elgi Equipments	191.25	92.1	-51.84	Bonus shares 1:1, 30 times is slightly on the costly side. good company otherwise
Chakkilam Infotech L	27.75	13.4	-51.71	with such low NPM, not even a worthy business. Too costly
Commercial Engineers	92	44.45	-51.68	Listed in 2010 and going to new lows every month
Alka Securities	3.35	1.62	-51.64	Run away from loosing any money
Nexxoft Infotel	120.6	58.55	-51.45	Price manipulations - another hyderabad based IT company
Well Pack Papers	35.15	17.2	-51.07	Too Costly for a low profit company.

Sujana Towers Ltd.	214.1	110.1	-48.58	20 times earnngs, strong price spike in Sep,now a falling knife
Vaishnavi Gold	54	28.4	-47.41	27 times earnings. Another Hyderabad based IT Company
Binny Ltd.	218	116.4	-46.61	Valuations are more for the assets it holds
Neha Internation	211.35	112.9	-46.58	Too heavy valuations. Volatile promoter shareholding,
Chartered Logistics	28.8	15.45	-46.35	around 40 times earnings. Bonus brought the price down
Coromandel Internati	586.35	317.3	-45.89	Stock split from 2 to 1
Polyplex Corpn.	632.6	343.6	-45.68	less than 20 times, BONUS 1:1 issued
Natraj Financial & S	65	36.3	-44.15	with such low NPM, not even a worthy business. Too costly
EID Parry	485.15	274.65	-43.39	Stock split from 2 to 1
GSS America Infotech	324	183.85	-43.26	around 20 times earnings, Another hyderabad based IT company
Arunjyoti Enterprise	125	71.55	-42.76	Listed in Jul 2010. 30 times PE, Taaza stores in Hyd and Secund
Sharp Industries	78.25	46	-41.21	5 to 6 times PE, Chemical company, no dividends, 33% promoter holding
Twilight Litaka Phar	155	92.2	-40.52	Pune based Pharma with a 6 times PE. 6-8% NPM. Pledging and selling by promoters bringing it down
Parekh Aluminex	450	272.45	-39.46	8 times earnings, 7-9% NPM for a Al company paying 0.5% or more regular dividend
Paragon Finance	34.35	21	-38.86	Financing auto and others by small companies is risky
Tatia Global Venntur	16.85	10.35	-38.58	Chennai based firm In Textile and Real-estate -where a lot of money is black
Shristi Infrastructu	380	235	-38.16	with such low NPM, not even a worthy business. Too costly
Dharanidhar Global a	32.85	21.2	-35.46	(526843)Promoters are exiting this company, run away
Elpro Packaging Ltd.	23	14.85	-35.43	Low NPMs, valuations look fine, but are promoter playing with the shares?
Ajel Ltd.	29.35	19.2	-34.58	Loss making IT company, just ignore
Capital Trust Lt	91.25	59.8	-34.47	Unacceptable PE, for a no Dividend NBFC
Shiva Global Agro	59.5	39.15	-34.2	Fertilizers with low NPMs are dependent on government
Raj Packaging In	116.6	76.75	-34.18	>1% dividend for 30 PE company with low NPMs. Promoters playing with stake
Premier Capital Serv	114.5	76.35	-33.32	even 70% promoter holding and 20-90% NPM don’t make this worth more than 50 times
Farmax India L	22.55	15.05	-33.26	Why is this FMCG company with unknown brands worth 60 times
Baroda Extrusion	30.95	20.75	-32.96	Kanugo owned Copper firm with low NPM, less than 6 times earnings. No dividends, 63% promoter holding
JMD Telefilms Indust	22.25	15	-32.58	Too Costly for a low profit company.
Centrum Capital	1,850.00	1,273.05	-31.19	100 times earnings for a small company is exuberant
Gyscoal Alloys Ltd.	45.25	31.2	-31.05	Falling since listing in Oct 2010, with 5 Cr profit and 4 Cr Debt, can buy @ 20
Parshwanath Hous	88.85	61.45	-30.84	Go for bigger housing finance corporations, risk cannot be played small
Karuturi Global Ltd.	30.05	20.85	-30.62	Roses don’t make business worth >100 times
Murli Industries Lt	89.4	62.1	-30.54	bad Sep results have pushed this down. Maloo owned edible oils company makes regular profit and is worth its 8 times
Shetron Ltd	38.3	26.65	-30.42	pledging by promoters and more than 20 times earnings
GCV Services	127.15	88.7	-30.24	Why would somone buy a loss making or nil profit making firm
Hanung Toys & Textil	318	222.7	-29.97	6 times PE for a 10% NPM, 90 Cr NP making company, 370 Cr reserves, 65% promoter holding, regular 0.5% dividend
Jaybharat Textiles	242.3	170	-29.84	Attrocious PE for a 6000 Cr market cap for a textile firm that makes 20 Cr NP
Arvind Internati	35.15	24.8	-29.45	mattress, foam, sofa maker with unacceptable valuation
Kay Power And Paper	27	19.05	-29.44	Why is this paper maker valued more than 20 times? Promoters hold 38%