Anyways I've pasted my write up here, please feel free to move it if needed. Also please let me know the negatives.
Company: DFM Foods LTD. 06/22/2012
Meaning: Business
A pioneer in the Indian snack foods market, DFM Foods introduced CRAX Corn Rings in 1984.Today, with sales across North, West and Central India, DFM Foods is a public company listed on the Bombay Stock Exchange (BSE).
Corn Rings and Wheat Puffs are marketed under the CRAX and NATKHAT brand names respectively. Both these have become extremely popular snacks, especially among children.
In the nankeens segment, the company offers a complete range of products consisting of 13 distinct product variants that include Bhujiyas, Daals, Mixtures and Nut-Mixes. These are sold in several pack sizes to cater to both casual/impulse consumption as well as consumption at home.
DFM Foods has two processing facilities, one in Ghaziabad, and the other in the Greater NOIDA region, both in close proximity to the Companyâs corporate office in Delhi. The facilities make use of state-of-the-art manufacturing equipment from across the globe, to ensure consistency and quality of all our products.
Stock price movement over the years
|
3years
|
5 years
|
6/21/2012 -214
|
6/21/2009
|
6/21/2007
|
Price
|
36
|
12
|
CAGR
|
81%
|
78%
|
1lakh invested would have grown to
|
592,974.10
|
1,786,899.02
|
Management:
DFM Foods is a Family owned business
Mr. R. P. Jain - Chairman - Father
Mr. Mohit Jain -Vice Chairman & MD â Son â (Finance from Wharton School,PA,USA)
Mr. Rohan Jain -Executive Director - Grandson
Directors
Mr. Pradeep Dinodia
Mr. Mohit Satyanand
Mr. S. C. Nanda
Skin in the game: Promoters hold 69% of the shares & Independent Directors on board.
CMP
|
214.00
|
Market Capitalization
|
213.99 Cr
|
Sales Fy11
|
169 Cr
|
EPS Fy11
|
10.36
|
PE Fy11 (excl one time income)
|
20.66
|
Book Value Fy11
|
33
|
Dividend Per share (excl onetime payment)
|
2.5
|
Approximate Payout Ratio
|
27.87%
|
Sustainable growth [(RoE (1- payout ratio)}
|
26.64%
|
Dividend Yield 9exclextra-ordinaries)
|
1.10%
|
Debt to Equity
|
0.7
|
Moat/Financials:
Year
|
Mar ' 12
|
Mar ' 11
|
Mar ' 10
|
Mar ' 09
|
Mar ' 08
|
Mar ' 07
|
CAGR 3yrs 09-12
|
CAGR 5yrs 07-12
|
Sales
|
169.42
|
119.84
|
72.19
|
78.42
|
48.66
|
39.70
|
29.27%
|
34%
|
Operating profit
|
20.00
|
14.58
|
7.36
|
5.86
|
2.14
|
1.40
|
51%
|
70%
|
Gross profit
|
18.30
|
14.12
|
7.32
|
3.59
|
1.74
|
1.54
|
|
|
EPS (Rs)
|
10.36
|
8.32
|
4.22
|
2.00
|
0.79
|
0.53
|
73%
|
81%
|
Equity or Book Value
|
33.00
|
22.70
|
16.46
|
13.99
|
13.15
|
12.96
|
33%
|
21%
|
Dividend(amount)
|
2.50
|
2.00
|
1.50
|
1.00
|
0.50
|
0.50
|
36%
|
38%
|
Dividend(%)
|
25.00
|
20.00
|
15.00
|
10.00
|
5.00
|
5.00
|
|
|
cashflow
|
|
7.49
|
10.59
|
3.07
|
1.04
|
1.19
|
|
|
|
2011
|
2010
|
2009
|
2008
|
2007
|
Return On Capital Employed(%)
|
38.83
|
23.5
|
23.03
|
8.77
|
12.09
|
Return On Net Worth(%)
|
36.65
|
25.65
|
14.32
|
5.92
|
4.08
|
|
|
|
|
|
|
Operating margin (%)
|
12.17
|
10.18
|
5.13
|
4.4
|
3.52
|
Gross profit margin (%)
|
10.99
|
8.85
|
4.48
|
3.7
|
2.64
|
Net profit margin (%)
|
6.84
|
5.73
|
2.54
|
1.54
|
1.29
|
RISKS
1. Rising prices of raw materials particularly that of packaging materials caused severe pressure on margins.
2. Increasing organized competition will remain a constant threat.
3. Substantial slowdown in the growth momentum of existing product sales could lower the returns on the new investment in capacity creation.
4. A major challenge being faced is the continued development and stabilization of organizationalcapacity and management systems to manage and sustain the high growth of the business.
Steps to counter Risks & Grow
* Efforts to expand and intensify the sales distribution system continued through the year as did efforts to improve its productivity. Organization structures were strengthened and new initiatives in marketing and product development were taken
* Work on the establishing of a new manufacturing facility in UP was initiated with
the acquisition of industrial land during the year. The investment in this new state
of the art facility is likely to be around Rs. 70 crores and is expected to go on
stream during the third quarter of this year
* A two-pronged strategy is under implementation. Namely to enter new markets to
generate additional growth momentum and to develop new variants products to
enlarge the customer base.Yet to enter the south Indian market.
I was however let down by the recent news of the director being fined by the SEBI. Basically he violated one of the rules where in a insider cannot involve himself in a opposite trade within six months of his first trade. Also he failed to disclose it. Anyways I'llwait to hear more on it in the next earnings call.