Sukhjitstarch and chem (BSE CODE 524542)

The company came out with an EPS of 53 against 19(Mar 2010)and is available at 285 at low PE of 5.6.The company has been a consistent performer for quite a long time.Friends, kindly express your opinion

Variable FY06 FY07 FY08 FY09 FY10 YoY 5yr CAGR
Sales Turnover (Rs. Cr.) 130.77 173.92 191.77 211.70 265.52 27.60 20.58
Profit After Tax (PAT) (Rs. Cr.) 7.13 20.42 20.15 11.63 14.44 24.16

Net profit of Sukhjit Starch & Chemicals rose 47.55% to Rs 10.52 crore in the quarter ended March 2011 as against Rs 7.13 crore during the previous quarter ended March 2010. Sales rose 23.53% to Rs 90.31 crore in the quarter ended March 2011 as against Rs 73.11 crore during the previous quarter ended March 2010.

For the unaudited full year, net profit rose 169.46% to Rs 39.53 crore in the year ended March 2011 as against Rs 14.67 crore during the previous year ended March 2010. Sales rose 31.08% to Rs 339.12 crore in the year ended March 2011 as against Rs 258.72 crore during the previous year ended March 2010.

The ten year detail was given I think the three was deleted because of this existing thread Prakash can you post the details again

The cash flow and net block details

Fy. 2011. 2012. 2013. 2014. 2015
Oper cash flow. 45 cr. 36 cr. 15 cr. 35 cr. 62 cr

Net block. 106cr. 112 cr. 180 cr. 198 cr. 217 cr
The Opm was 18% in 2011 when the corn prices were ruling at present level and last 4 years Opm is around 11/12 now they have the food park which give them the storing ablilty and the corn price are stabilising they have gone farmer education and co farming of maize so with fy 17 revenue expected around 600 cr if the Opm comes upto even 15/16% industry average ( for by products liquid glucose and sorbitol out of 550 cr revenue liquid glucose comes around 200 cr sorbitol 40 cr and by product around 120 cr). At 15% Opm we can expect around 100 cr EBITA and EBIT of around 65 cr if things go smooth we can see some real jump in net profit backed by good cash flow
Interesting they have consistently paying dividend for last 8 years and this year it is around 50% promoter holding around 60% HNI holding 10% total eq 74 lac so only around 10/12 lac floating share.
They have not diluted the equity in the past no pending warrants or preference capital.
They have good clients like zydus Cipla in pharma and Britannia Dabur Colgate in FMCG
Present price is quoting less than 10 PE and less than 7 PCF and less than 1 book value. The debt is around 160 cr this year reduced to around 120 cr
Seems interesting please post your comments
Disl invested a small qty

The world starch derivative market is also expected to grow good just have a look at the report
LONDON, April 21, 2016 /PRNewswire/ – The global starch derivatives market is expected to witness steady growth during the forecast period. Increasing usage of starch derivatives in industrial application is propelling the growth of the starch derivatives market. The starch derivatives market is categorized by product type into maltodextrin, glucose syrup, cyclodextrin, hydrolysates, and modified starch. Based on application, the starch derivatives market is segmented into food and beverages, feed, cosmetics, paper and pharmaceuticals among others including industrial applications and bio-ethanol. Glucose syrup holds a major share of the market, whereas maltodextrin experienced the highest growth in the market in terms of revenue in 2014. The demand for glucose syrup is expected to grow at a higher rate as compared to other product segments due to its increasing applications in various industries such as feeds, pharmaceuticals, paper, and cosmetics in developing countries. It is often used as flavor enhancer, volume-adding agent, texture agent, and inhibitor of sugar from crystallizing in drinks.

Furthermore, increasing health consciousness and growing demand for natural sweetener is driving the demand for starch derivatives globally. Increasing demand for convenience food and beverages in various countries such as China, Germany, India, the U.S., Brazil, and Saudi Arabia is one of the key factors propelling the growth of the starch derivatives market. In the past few decades, several developments have taken place in the starch derivatives industry, which has experienced a shift from conventional food products to time-saving food containing starch derivatives in the convenience and processed food category.

Globally, demand for starch derivatives is governed by the performance functionality and quality of the products. In addition, growing demand for starch derivatives in the pharmaceuticals industry is one of the key factors supporting the growth of the market significantly. Increasing research and development expenditure coupled with fluctuation in raw material prices is likely to restrict the expansion of the starch derivatives market. However, this market is expected to grow in the next few years due to rising consumption of starch derivatives in various emerging countries and increasing application of starch derivatives in different sectors such as food and beverage, paper, animal feed and pharmaceutical among others. The research report covers drivers, restraints and opportunities of the starch derivatives market.

In 2014, Asia Pacific held the largest share of the starch derivatives market followed by Europe, North America, and Rest of the World (RoW). Asia Pacific is the largest as well as the fastest growing regional market due to rising demand for starch derivatives in India and China. Moreover, Asia Pacific is expected to maintain its leading position during the forecast period. The rise in demand for starch based food and beverages, and increasing application in pharmaceutical sector in India and China is expected to drive the growth of the starch derivatives market in Asia Pacific. Therefore, food and beverage manufacturers are focusing on producing starch based products to meet the consumers need in Asia Pacific

Key players in the starch derivatives market include Tate & Lyle PLC, Cargill, Incorporated, Archer Daniels Midland Company, Ingredion Incorporated, Roquette Frères S.A., BENEO-Palatinit GmbH, AGRANA Group, Avebe U.A. Grain Processing Corporation and in India Sukjit starch and chemicals ltd

Global starch derivatives market, by product type
Glucose Syrup
Modified Starch
Global starch derivatives market, by application
Food and Beverages
Others (including industrial applications, bio-Ethanol, bio fuel, glue manufacturing etc
There are some Indian specific market research also if I get the link I will post


Have a look at investors ppt and post some comments

[PPT]Investor Presentation 2015 - Sukhjit Starch & Chemicals Limited › images › sukhjit
➢ First entry mover advantages: One of oldest producer of Starch in India and third largest in India as per production
➢ Long lasting relationship with biggest brands and end users
➢ Consistent expansion results in huge jump in capacity from 1800 TPA in 1943 to over 4 Lacs TPA in 2014-15
➢ Diversification across customers and end-markets
➢ Strong management team with proven track record
➢ Consistent & uninterrupted dividend track record for the last four decades
➢ India with its huge population base and low consumption levels offers a massive opportunity to capture

➢Change in Consumer behavior with respect to habits & patterns of food consumption

➢Packaged ready-to-eat food is the order of the day due to ready OTC availability: Increase in requirements of modified and value-added starch products i.e. its derivatives, in the packaged food industry

➢High-fructose corn syrup, also high-fructose maize syrup in other countries comprises any of a group of corn syrups that has undergone enzymatic processing to convert some of its glucose into fructose to produce a desired sweetness.

➢Beer industry substituted sugar with High Maltose Corn Syrup (HMCS) and Dextrose,
both derivates of Maize Starch.

➢Manufacturers of Aerated Drinks yet to substitute sugar with an alternative. Enquiry made by manufacturers of Aerated Drinks and Beer, as to an alternative of sugar has increased in last few years.
•Per capita consumption : Low per capita starch consumption in India of 1.5 kg as compared to global average of 6.1 kg: ¼ of the consumption as comparison to china.
•Abundant availibility of maize and promoting export of value added products: Maize production is expected to increase with higher yield
•Food/Pharma applications: High price of sugar leading to search for its alternatives in food & beverages industry Steady requirement for glucose.
•Rising health consciousness among consumers leading to a higher appreciation of nutritional superiority of products using corn starch & derivatives
•New industrial applications: Modified starch suited for various specific applications resulting in higher efficiency and better quality of end products. E.g. application of cationic starch in paper industry is resulting in lower fiber loss, better printability, etc. Applications of PGS in drilling *New use for starch in manufacturing ethanol


Government allocates Mega Food Park project to Sukhjit Starch & Chemicals
Monday, 13 April, 2015, 08 : 00 AM [IST]
Our Bureau, Mumbai
Sukhjit Starch & Chemicals Ltd, a leading starch manufacturer, has been awarded a Mega Food Park project in Punjab.

The ministry of food processing industries (MoFPI) had received 72 proposals both from state governments and private players for 17 food park projects. Out of these, seven projects were allocated to state governments and 10 to private players.

Sukhjit Starch & Chemicals Ltd, Phagwara, was among one of the private players, which were awarded the projects. The commissioning of the park will be undertaken by the company through a separate SPV (special purpose vehicle), which may be its subsidiary company or an associate.

The Mega Food Park will be set up under the policy /provisions governing Mega Food Parks issued by the MoFPI, on a separate piece of land measuring about 55 acre at village Rihana Jattan, Tehsil Phagwara, district Kapurthala, allotted to the company on a long-term lease basis by the Government of Punjab. The SPV will create common facilities for various food processing units like site development, internal roads, drainage, warehousing, factory buildings /sheds for medium & small enterprises (MSEs), effluent treatment plants, laboratories, weigh-bridges, captive power plants, steam generating units and so on in the Mega Food Park, entailing an investment of about Rs 125 crore.

Speaking on the achievement, I K Sardana, MD, Sukhjit Starch & Chemicals Ltd, said, “The company has achieved a remarkable step and I believe this particular project will take the company to next phase of growth. Punjab is among the 12 states, which have been termed as potential location for setting up a park by ministry of food processing industries. Moreover, the proposed food park would not only propel agro industries in the state but also richly benefit the farmers of Punjab and neighbouring states. The Mega Food Park Scheme, based on cluster approach, is modelled on hub and spoke architecture. It aims at facilitating the establishment of a strong food processing industry backed by an efficient supply chain, which includes collection centres, central processing centre (CPC) and cold chain infrastructure.

The scheme envisages one time capital grant of 50 per cent of the project cost (excluding land cost) subject to a maximum of Rs 50 crore.

Now the storage portion is ready for operations in Phagwara as of April 2016 now dry maize storing will give added benefit of year round raw material at lesser price I hope things turns better this qtr and they have also reduced there debt by around 30 cr

I was following this company in 2010-11 and had a position. My premise that time was this was more of a FMCG like company with huge potential. But later it seemed more akin to a commodity like company. If you look at the chart it follows sugar industry; more like a proxy to sugar.

Is there any change in the fundamentals of the starch industry which will see it have a sustainable growth? If so, then this look undervalued.

All said, I am interested in Sukhjit given its good management, dividend policy and undervaluation.

Roberto el S

Disc: Not invested, but analyzing further


Thank u sandriano I was also looking at that angle of sugar cycle if you see the maize price in 2011 and the Opm was at around 12/13 with maize price at the same level as of now in fy 15 Dec qtr we saw Opm of above 12 and if the Opm is maintained around 12.5/13 with a normal revenue of around 600 cr 75/80 cr ebita and around 16 cr interest ( they are not Capitalizing the interest) and deprivation around 14/15 cr. the EBIT should be around 55/60 which gives the interest coverage ratio of around 5 and a PAT of above 30/35 cr looks possible with 74 lac equity 60% holding by promoters 29 lac floating with p.satish Kumar and Sudhir sindwani holding 2 lac and HNI 8 lac only 19 lac shares in market. The good thing they have not diluted the equity in the past and no warrants or preference capital is pending
Yes the cyclical nature I think can be over come now because of the food park secondly the revenue if we see liquid glucose and sorbitol and dextrine all Proxy FMCG /PHARMA products accounts to about 250/300 cr and the expanding by products is around 110 cr so the cyclical nature end product ie modified starch is around 120/150 cr.
One thing is with there vast experience and varied product profile with increased storing ability and integrated maize farming , I also noticed that there cash flow is very good which has helped them in there Capex building with this i hope the Opm increases in the coming qtr
I also considered the kind of growth witnessed in China in the starch derivative market and in this sector I felt SUKHJIT is slightly better than Anil ltd in managing the trade recievable and inventory and debt
My views may be biased if you could highlight some negative points which got your attention please do post
Discl. Invested a small qty recently

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maize and summer coarse cereals have respectively increased to 2.72 lakh hectare and 6.30 lakh hectare compared to 1.97 lakh hectare and 5.59 lakh hectare in previous year.
Indira can u look into this link pl

Guys I also noticed one more thing the promoters have bought nearly 30000 shares in fy 15 in open market at the cmp 230/245 and in the last three years they have increased by more than 3%
Secondly even in Gujarat Ambuja qtrly result the starch derivate segment has grown at a healthy pace important thing when compared with Anil sukhjit is better off in debt and capital management and cash flow by many notches I also noticed the volume picking up with 98% delivery.
Also Prakash do you have any idea about the profile of the investor sudhir Sidhwani or satish kumar or s.sangeetha

Prakash the result is very stable and consistent the good part is there is substantial improvement in the cash flow from operations according to my calculation from the the p/l and bs it is 77 cr the debt is reduced by nearly 30 cr long term and short term and there is an increase in current investment of 18 cr the top line is improved if you notice the Ebita could not improve because of additional employee cost of 5 cr over the previous fy that is a good sign for me that they have added additional employees nearly 125 nos this fy, there is also reduction in power cost as proposed by them the raw material cost is slightly up that would be mitigated in coming qtrs because of the storage capacity they have built so 77 cr cash flow business available at 180 cr m.cap looks interesting.
Secondly I checked the point you asked I think some Mnc after there Aquisation failed in Brazil may be coming with a good open offer I don’t know checked in the fnb circles could be Cargill foods ltd still iam not sure you verify and let me know please

Adrian it cannot be Cargill Inc my as per fnb and pnr news wire it could be ARCHER DANIELS MIDLAND COMPANY US OR ingredion Inc us but still a unconfirmed news let me dig further but yes the result are a expected and shows good sustainable development

Concall Invite :

1st June at 11.30 AM


CONFERENCE CALL - from Capital Markets

Expects to improve the performance gradually in FY’17

The company held its conference call on 1st June’16 and was addressed by Mr Aman Sethia VP Finance

Key Highlights

  • Net sales for FY’16 were up by 6% and OPM was lower by 120 bps to 11.1%. Depressed market conditions in FMCG and food industry resulted in poor demand from the sectors and higher maize prices affected the margins. Maize price remained an issue through the entire year of FY’16. India imported maize after long time in FY’16 which otherwise used to be a net exporter.

  • Exports demand was good in FY’16 but due to higher raw material prices the company did not took some export orders.

  • Maize prices which averaged around Rs 13-14 per kg went to peak of around Rs 17 per kg in FY’16. Even current price in April-May’16 are higher by around 10% on YoY basis. Maize prices are always higher than the MSP Maize prices

  • As per the management, while a lot depends upon the rainfall, the current inventory of maize is so low that it will take about 2-3 crop cycle for maize to restore the demand and then price to stabilize

  • Going forward, management expects to improve performance gradually as the year FY’17 progresses.

  • New food related ingredients to be introduced in FY’17. These are special applications in food industry which will be customized for the existing customers where the realizations are higher than the traditional products

  • Rs 56 crore is the long term loan as on Mar’16.

  • For the Mega Food Park project, Ministry of Industry approval has been received and the company will be receiving approvals from the other ministries during the course of the year. The company is going slowly on this project and only by end of next couple of quarters; more clarity will emerge on the way forward and commercialization of the project.

  • Mega Food Park will be a complete food processing facility equipped with high technology infrastructure for perishable foods and vegetables. All facilities be it warehousing, cold storage, plug and play facilities, water treatment facilities, electrification etc will be provided in this park.

  • There would be a total investment of about Rs 115 crore and Punjab government would provide a subsidy of Rs 50 crore. Sukhjit Starch will be main shareholder and over 2-3 years, will invest about Rs 40-50 crore in the food park. Further the company will also invest about Rs 40 crore in creating its own unit in the food park. The funds will be from the internal accruals of the company and some loans from bank.

  • Of the total sales around 15% come from feed stock segment which goes for poultry industry.

  • The company is operating at around 75% of installed capacity. Only balancing capex of around Rs 3-4 crore required for next couple of years.

  • Going forward by next 2 quarters things should stabilize in terms of Maize prices, however all depends upon monsoon.

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Adrian When I was in jalandar I made a visit to phagwaṛa and had a chance to meet some of management guys one thing is clear they will not sell stake in the company for whatsoever reason they are highly passionate about the business and mr. sardana has got a good reputation and political clout, he feels strongly about the business growth potential and kept on saying that he would prefer a susutianable growth with good capital mangemeant rather than a highly leveraged growth. He was clear that the last two years were good on the cash flow side even though the bottom line has not improved which he feels will be visibly seem from the second half of of fy16. They have made some capex spending which will reduce the power cost and operating expense and efficiency.
They are developing new products both for food additive and textile market which they are tight lipped.
But the good thing is there liquid glucose market has gained a good traction and price realistations will be better, finally they seemed to have a honest enthusiasm about the business and good integrity that solves the management scuttle butt.


you can participate here

Thanks, Paresh. The spelling here misguided me. I am trying to delete my previous post. Regards, Deb.

The number is looking good now:-

Market Cap.: ₹ 182.54 Cr.
Current Price: ₹ 247.35
Book Value: ₹ 303.07
Stock P/E: 7.92
Dividend Yield: 2.02%
Face Value: ₹ 10.00
Listed on BSE
52 Week High/Low: ₹ 280.00 / ₹ 217.50
PEG Ratio: 0.76
Return on equity 5years growth: 0.53%
Return on equity: 12.27%
Debt: ₹ 165.02 Cr.
Debt to equity: 0.82
ROCE3yr avg: 14.92%
Profit growth: -0.65%
Price to Cash Flow: 2.92
OPM: 11.10%
Price to Free Cash Flow: 15.52
Promoter holding: 60.67%
Unpledged promoter holding: 60.67%
Investments: ₹ 14.04 Cr.
Return on capital employed: 15.18%
EPS: ₹ 31.23
Dividend yield: 2.02%
Graham Number: ₹ 461.48
Enterprise Value: ₹ 326.93
Intrinsic Value: ₹ 381.99
Price to Sales: 0.32
Industry PE: 0.00
Industry PBV: 0.00
EPS last year: ₹ 31.44
Expected quarterly EPS: ₹ 11.83 (copied from screener dot in)

Stock is trading way below its Graham No, Book value and Intrinsic value.

Disclaimer - Not invested yet, may create a small position here in coming days.