Power My Portfolio Value Pick: Kwality Ltd

Kwality Ltd. (Kwality) was incorporated in 1992 as Kwality Dairy (India) Ltd. Kwality manufactures various dairy products, which include ice cream, low cholesterol ghee, pure ghee pure cow ghee, butter, instant dairy creamer, dairy mix, skimmed/whole milk powder, milk in pouches, curd, paneer, lassi, chaach, tetra pack milk, sterilized flavored milk, yogurt, cheese etc.

Key Facts:

  • Major player in B2B business model, catering government organizations, religious institutions, and retail chains such as Britannia, Hindustan Unilever, ITC, Mother Dairy, Cadbury’s, Canteen Stores Department, Vadilal, Cream Bell etc.
  • Company is now focusing on B2C business.
  • Akshay Kumar, as brand ambassador for its entire range of products.
  • 6 Manufacturing Unit.
  • Network of 350,000+ farmer families across 4,700 villages in Uttar Pradesh, Haryana, and Rajasthan, amongst the largest milk producing states of India.
  • 4.3 mn litre per day Milk Handling Capacity
  • Export to 28+ countries including Japan, UAE, Seychelles, Bangladesh, Sri Lanka, Jordan, Niger, Morocco etc.

Stock Outlook:

  • M-cap: INR 2637 cr
  • CMP: 110 INR (11th Dec 2017)
  • PE: 16
  • EPS: 6.9 INR
  • Book Value: 46.9 INR
  • Share capital is 23.74cr of FV 1.
  • Promoter Share holding is 64.1%
  • FII/DII/FPI Share holding 6.68 %

Future Outlook:

  • Overall Daily industry is estimated to record 14.8% CAGR, over FY2015-20.
  • Organized Dairy player  is expected to gain 26.2% share by 2020 from 22% currently.
  • Over the next 3 years, Company intend to increase the share of consumer business from the present 40% to 70%.
  • Company is going to launch 8-10 value-added products in the next 12-15 months.
  • In next 3-5 year stock could deliver 3x-5x return.

Be Smart. Invest Smartly.

Disclaimer : Please take advice of your financial advisor before any investment.

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