Starting a new thread fro Piccadily Agro Industries on behalf of Manish B Gajria. Think it deserves some dedicated attention.
Here is what Manish had to say about Piccadily when he introduced the stock idea in his My top 5 picks
Piccadilly Agro - A misunderstood / undiscovered story. Considered and valued as a sugar company, but has transformed into a brewery. Derives over 70% of its revenues from the brewery segment and growing well, hence a perfect candidate for PE rerating. Available in a reasonable range of 36 to 40.
As mentioned earlier, my notes on what interested me towards Piccadilly other than its financials and good performance off late.
Till FY 2007 there was nothing much to talk about Piccadilly. They were like most other sugar companies from the north, making a loss. At the end of FY 2007, the company was only into sugarcane crushing and thus into production of raw sugar, however they had started with the setting up of liquor facility. So, till FY 2007 they were largely a loss making company. For FY 2008 the company had started with the liquor production and sold some 2.17 million cases. In that year the company made a net profit of just Rs 12 million but that was on account of 50 million loss from Sugar Division. At the end of FY 2008 the company had some 270 million capital work in progress, so they were still expanding their liquorfacility. For FY 2009 the company sold 2.86 million cases with a turnover of 480 million. The company achieved Rs 54 million profit from liquor and 32.9 million profit from Sugar i.e. around 87 million net profit. At the end of FY 2009 the company had 430 million capital for work in progress. This was again for the expansion of liquor unit. For FY 2010 the company did a turnover of Rs 820 million from liquor unit which is almost a 70% increase in revenue for liquor unit over FY 2009. The company achieved a Profit before Tax of around 170 million from liquor unit and assuming 33% tax, a net profit of Rs 113.9 million, so more than 100% increase in net profit from the liquor unit of the company. At the end of FY 2010 the company has close to Rs 600 million debt on its books, however most of it has gone towards expansion, as its added to the gross block. Between FY 2009 and FY 2010 the gross block of the company increased by Rs 330 million from Rs 830 million to Rs 1160 million, while there is another Rs 130 million capital work in progress. This clearly shows that there is some more expansion underway which would get added to the existing capacities in the days to come.