Himalya International-Hameed-2aug2k5
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Himalya International-Dark Horse
BSE 526899 BUY (Not applicable for day-traders.)
CMP Rs 13.80; Target Price Rs 20
Current Market Cap Rs 22 crore.
Market Cap on Targeted price: Rs 34 crore.
Upside potential: 45 per cent
New Delhi based mushroom and agro-commodity producer Himalya International may turn out to be the dark horse in a segment which is dominated by the likes of Agro Dutch and Flex Foods.
Recent events including the withdrawal of anti-dumping proceedings by the US Department of Commerce, will no doubt help. What would allow Himalya to grow faster is a slew of orders for Button mushrooms received from large US chains that will make a major change to its financials.
First, the rescission of anti dumping investigations
The DEPARTMENT OF COMMERCE, INTERNATIONAL TRADE ADMINISTRATION, United States was conducting yearly review against the Company and some other Mushroom Companies from India and China since 1998. The rescind order, released recently, means that there shall be no more annual review in case of the Company and the effective Anti Dumping duty shall be the last assessed, that is Zero in case of the Company.
The Company has received communication from the United States Department of Commerce on the final Anti-Dumping Duty rates on its canned mushrooms. The company has received Zero Anti-Dumping Duty. This gives an extreme edge to the company which competes with China and other nations in the US Market. The latter being the largest market for mushrooms in the world. The Company expects a windfall in its sales due to this development.
A Slew of orders from US MNCs
While participating at the Natural Restaurant Show, the largest food services event held in North America and attended by 75,000 industry professionals from over 140 countries, Himalya International bagged an order worth US $ 1.2 million from Cohen Foods, USA, one of the largest wholesale food chains in America.
The National Restaurant Show is an annual event where visitors come to see new product ideas and presentations. Supply discussions with a large restaurant chain were held at this event and an estimated sales commitment of over $2.5 million is likely to materialise shortly.
The order for mushrooms was bagged in addition to the 1.5 million pounds of specialty baby potatoes with skin-on for high-end Retail and Foodservice market. The potatoes supplied by Himalya would be re-packed in 12 oz packs by a US food giant and shall be on the shelf of 'Acme' the major supermarket chain. The Acme Group has 2,400 stores spread across 38 states making it the second largest "food-drug" retailer in the United States.
The US market, is Himalya's strength
Himalya has a on-going relationship with another high-end retail chain "Trader Joe's" for potato skins The total volume of this product in 2005 is expected to be 2.5 million lbs valued at Rs 8 crore or roughly $ 1.7 million. During last 5 years, Himalya has successfully replaced Mexican and Columbian suppliers.
Apart from Cohen, Acme and Trader Joe's, Himalya is currently executing a Rs 4 crore order for export of mushrooms under the brand "Grower's Gourmet" The trade mark has been registered in United States of America. Himalya will shortly launch value added gourmet products in the US, the first Indian company to have launched value added finished, ready to eat appetizers for the mainstream population in United States.
Earlier the Company entered IQF culinary herbs for which it has made backward linkages by way of contract farming with the farmers of Paonta Sahib, Himachal Pradesh. A total of 150 farmers are being involved during the current year and anticipated volume of frozen herbs shall be 800 Tons leading to an addition of US$ 3 million to its turnover during the year.
Existing orders worth $ 1.5 mn for IQF Button Mushrooms are being executed. Himalya expects its order book to swell during the year as it has tied up with the largest US company in the Frozen Culinary Herbs segment. In addition to Frozen Mushrooms and Vegetables, HIL shall also process IQF herbs for its US partner.
The move has been hailed as the "Modern Export Oriented Green Revolution" for the farmers of Clean and Green Himachal Pradesh.
Financials
For the year ending March 2005, Himalya reported Revenues of Rs 17 crore, with after tax profits of Rs 37 lakh. For the Q1 to June 2005, Himalya has reported revenues of Rs 5 crore, with after tax profits of Rs 47 lakhs. With an order book of $ 15 mn under its belt, it is likely that Himalya will report Revenues close to the Rs 50 crore mark for the year ending March 2006. After tax profits should improve substantially to about Rs 4 crore.
On an Equity of Rs 16.98 crore, the March 2006 EPS could turn out to approximately Rs 4. A very conservative PE multiple of 5 should give the scrip a target price of Rs 20 by March 2006, a gain of 53 per cent. The PE multiples could rise to double digit by 2007, as earnings trajectory becomes more predictable and early on in 2007, all things remaining equal, the Himalya stock should quote around the Rs 50 mark.
(May not be useful for day-traders.)
Himalya International-Dark Horse
BSE 526899 BUY (Not applicable for day-traders.)
CMP Rs 13.80; Target Price Rs 20
Current Market Cap Rs 22 crore.
Market Cap on Targeted price: Rs 34 crore.
Upside potential: 45 per cent
New Delhi based mushroom and agro-commodity producer Himalya International may turn out to be the dark horse in a segment which is dominated by the likes of Agro Dutch and Flex Foods.
Recent events including the withdrawal of anti-dumping proceedings by the US Department of Commerce, will no doubt help. What would allow Himalya to grow faster is a slew of orders for Button mushrooms received from large US chains that will make a major change to its financials.
First, the rescission of anti dumping investigations
The DEPARTMENT OF COMMERCE, INTERNATIONAL TRADE ADMINISTRATION, United States was conducting yearly review against the Company and some other Mushroom Companies from India and China since 1998. The rescind order, released recently, means that there shall be no more annual review in case of the Company and the effective Anti Dumping duty shall be the last assessed, that is Zero in case of the Company.
The Company has received communication from the United States Department of Commerce on the final Anti-Dumping Duty rates on its canned mushrooms. The company has received Zero Anti-Dumping Duty. This gives an extreme edge to the company which competes with China and other nations in the US Market. The latter being the largest market for mushrooms in the world. The Company expects a windfall in its sales due to this development.
A Slew of orders from US MNCs
While participating at the Natural Restaurant Show, the largest food services event held in North America and attended by 75,000 industry professionals from over 140 countries, Himalya International bagged an order worth US $ 1.2 million from Cohen Foods, USA, one of the largest wholesale food chains in America.
The National Restaurant Show is an annual event where visitors come to see new product ideas and presentations. Supply discussions with a large restaurant chain were held at this event and an estimated sales commitment of over $2.5 million is likely to materialise shortly.
The order for mushrooms was bagged in addition to the 1.5 million pounds of specialty baby potatoes with skin-on for high-end Retail and Foodservice market. The potatoes supplied by Himalya would be re-packed in 12 oz packs by a US food giant and shall be on the shelf of 'Acme' the major supermarket chain. The Acme Group has 2,400 stores spread across 38 states making it the second largest "food-drug" retailer in the United States.
The US market, is Himalya's strength
Himalya has a on-going relationship with another high-end retail chain "Trader Joe's" for potato skins The total volume of this product in 2005 is expected to be 2.5 million lbs valued at Rs 8 crore or roughly $ 1.7 million. During last 5 years, Himalya has successfully replaced Mexican and Columbian suppliers.
Apart from Cohen, Acme and Trader Joe's, Himalya is currently executing a Rs 4 crore order for export of mushrooms under the brand "Grower's Gourmet" The trade mark has been registered in United States of America. Himalya will shortly launch value added gourmet products in the US, the first Indian company to have launched value added finished, ready to eat appetizers for the mainstream population in United States.
Earlier the Company entered IQF culinary herbs for which it has made backward linkages by way of contract farming with the farmers of Paonta Sahib, Himachal Pradesh. A total of 150 farmers are being involved during the current year and anticipated volume of frozen herbs shall be 800 Tons leading to an addition of US$ 3 million to its turnover during the year.
Existing orders worth $ 1.5 mn for IQF Button Mushrooms are being executed. Himalya expects its order book to swell during the year as it has tied up with the largest US company in the Frozen Culinary Herbs segment. In addition to Frozen Mushrooms and Vegetables, HIL shall also process IQF herbs for its US partner.
The move has been hailed as the "Modern Export Oriented Green Revolution" for the farmers of Clean and Green Himachal Pradesh.
Financials
For the year ending March 2005, Himalya reported Revenues of Rs 17 crore, with after tax profits of Rs 37 lakh. For the Q1 to June 2005, Himalya has reported revenues of Rs 5 crore, with after tax profits of Rs 47 lakhs. With an order book of $ 15 mn under its belt, it is likely that Himalya will report Revenues close to the Rs 50 crore mark for the year ending March 2006. After tax profits should improve substantially to about Rs 4 crore.
On an Equity of Rs 16.98 crore, the March 2006 EPS could turn out to approximately Rs 4. A very conservative PE multiple of 5 should give the scrip a target price of Rs 20 by March 2006, a gain of 53 per cent. The PE multiples could rise to double digit by 2007, as earnings trajectory becomes more predictable and early on in 2007, all things remaining equal, the Himalya stock should quote around the Rs 50 mark.
posted by gd26ram at
5:48 AM
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