USHER AGRO LTD.- BUY

Scrip ID- USHER

Listed on- NSE / BSE

CMP- 33 / 32.95

Sector- Food processing

Agriculture contributes to 20% to India's GDP and 10% to India's total export earnings besides providing raw material inputs to many industries like textile, paper, sugar etc.

The size of India's food processing sector is estimted to be US$157 billion in FY2012 and is expected to grow at a CAGR of 20%.

 

USHER Agro Ltd. is into business of Food processing, Packaging and Sales under various brand names.

The product portfolio stands as below:

  

 

• As of December 2012, the company is having an installed capacity 7,15,400 MTPA for Rice & Wheat milling.
  
  
• Plants are located at Mathura, Chhata and Buxar. These locations happen to be in the proximity of sourcing centres of the Raw materials thereby reducing the burden of transportation.
  
  
• All these plants are fully automated and modernized. The processes of drying, storing, grading and finishing are fully automated resulting in cost saving and optimum utilization of the capacity.
  
  
• Company has Research & Analysis tie up with IISc Bangalore.
  
  
• The company has commenced a Cogenerative Captive Powerplant of 16 MW capacity at Mathura facility. This power plant is eligible for CDM & REC benefits and is also registered with UNFCCC for getting Carbon Credits. 
  
  
• Company has entered the exports market in 2010. Exported Rice worth Rs.11 Cr to 22 countries including Middle East, African & European countries.

Management & Financials:

The management team led by Dr. V.K. Chaturvedi (Managing Director), is quite experienced in food processing sector.

Quarterly performance:

Yearly performance:



P/E: Company's P/E is 2.66 as compared to the industry P/E of 34.11.

The stock fundamentals are sound and, it is evident that the stock is undervalued in comparison with the peer stocks and has huge potential to grow.

Operational efficiency of the company is amazing.

Also, the company is looking for related diversification to stamp its presence in the entire value chain.

This is one stock which seems to be a dark horse (missing from daily highlight.).

With the general elections round the corner and emphasis of both major parties on Agriculture & Food processing sector, the stock may even touch Rs.90 in a year's time.

Investors with slightly higher risk taking appetite can opt for it.

Link to company website http://www.usheragro.com/home.html

Disclosure: It is safe to assume that I have vested interest in all the stocks that I recommend.