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RESEARCH:: COMPANY:: RIDDHI SIDDHI GLUCO BIOLS LTD. 
                                                                                                                   (SMALL CAP) 

         10th April ’ 2010


 
Long Term Buy Incorporated in the year 1990, Riddhi Siddhi Gluco Biols Ltd. is a leading manufacturer of
CMP   Rs 216.15 starch and starch derivatives. The company manufactures 35 products. The company’s
Target price Rs 258 product range includes maize starch, liquid glucose, corn syrup, dextrose syrup and
Estimated EPS Rs 30.71 Maltodextrin, Glucose-D. The products manufactured by the company are used in various
 
Projected PE 7-10 industries such as paper, textile, pharmaceutical, adhesive, leather, food.
Investment period 6-9 months
 
Key Highlights
Stock Info (TTM Basis)
Sector   Starch/Misc • The company is a supplier of key ingredients to various industries such as Food,
Market cap (Rs Cr) 245.06 Pharmaceutical, Paper, Animal Feed, Confectionery, Textile.
Face value   10.00
Book value 143.12 • The company is the largest exporter in the Indian Starch Industry.
EPS 27.46
Cash EPS
  41.89 Future Outlook
Dividend 20%
Sales Growth  37.5%
At Current market price of Rs 216.15, the stock is available at P/E of 7.03x of its FY10E
RONW 16.51%
earnings, and 4.89x of its FY11E earnings. We recommend BUY with target price of Rs 258,
52 week H/L   237/71
Avg. Daily Vol (2wk) 28422 given that company’s future shows potential.
Chairman SL Chowdhary
Incorporation  1990 Particulars (In crores)  FY09  FY10E*  FY11E* 
Listed At BSE
Net Sales 530.68  707.95  878.79 
Equity capital  11.14 cr
Other Income 14.48  14.48  14.48 
 
Why to Invest in Shares of  Total Income 545.16  722.43  893.27 
Riddhi Siddhi Gluco Biols  Expenditure 481.73  635.88  781.55 
 
Ltd……………….…….….Page8  EBITDA 63.43  86.55  111.72 
  Interest 27.17  21.48  23.62 
CONTENTS 
PBDT 36.26  65.07  88.1 
Key Highlights & Future 
Outlook……………………………Page1  Depreciation 14.73  16.2  17.82 
Company Profile………………Page2  Profit Before Tax 21.53  48.87  70.28 
Peer Comparison……………..Page3  Tax 7.55  14.66  21.08 
Financials of the  
Profit After Tax 13.98  34.21  49.20 
Company………………………….Page4 
Equity Share Capital 11.14  11.14  11.14 
Basic EPS
60. 12.55  30.71  44.16 
Mr. Rajesh Gupta (CIO)
Cash EPS 25.77  45.25  60.16 
Prakash C. Pandey (AVP-PMS)
Tanisha Jolly (Research Operating Profit Margins 11.95%  12.23%  12.71% 
Associate)  Net Profit Margins 2.63%  4.83%  5.60% 
Source: Company Reports, Fairwealth Research Estimate
*Estimated

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SHAREHOLDING PATTERN
COMPANY PROFILE

Ridhi Sidhi Gluco Biols was incorporated in the year 1990.The company
is the leading manufacturer of starch and starch derivative. The company
transforms corn (maize) crops into essential industrial raw materials
adopting the most modern technologies.
Roquette Freres of France, has 14.95% stake in the company. Roquette
is a leading producer of starch derivatives and the largest producer of
polyols (sugar-free sweeteners) in the world. The company has entered
into a technical co-operation agreement with Roquette, which provides for
transfer of know-how for product and process up gradation and
technology for new products to be introduced by the company. The
company plans to introduce value-added products to cater to the specific
  needs of the food, pharmaceutical, textile and paper industries.
.
The Company Has Following Manufacturing Units-

Viramgam, Gujarat Gokak, Karnataka Pantnagar, Uttaranchal

The unit was taken over by the


The unit is the heart of the company’s The plant commissioned in the
company in the year 1996 by
activities year 2007.
Glaxo Smithkline India Ltd.

It is the only corn wet milling plant


The unit produces quality product for in Karnataka and it’s the largest in
international clients and is expected to the country and contributes about It is the second largest corn
serve as the export hub for the 17% of India’s total corn crop in milling plant in the country
company terms of quantity and hybrid
variety.

It has 100 acres of land in terms of It is located in 31 acres of land


It has 50 acres of land
the plant. area.

The plant is located in the industrial The unit has fresh water
The plant has power as it is
capital and major sea ports of the availability in abundance as it is
located in Uttarkhand state.
country located near river bank.

In the year 2008-09, capacity In the year 2008-09, capacity


In the year 2008-09, capacity utilization
utilization was 80% in terms of utilization was 68% in terms of
was 90% in terms of corn wet milling.
corn wet milling. corn wet milling.

   
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PEER COMPARISON

Riddhi Siddhi Sukhjit 


Particulars Gayatri Bio Tirupati Universal
Gluco Biols Anil Product
(In crores ) Organics Ltd. Starch  Starch Starch
Ltd.
Market Cap 239.01 74.96 46.61 89.81 5.30 5.42
Sales 675.89 358.57 53.44 236.10 44.94 76.71
PBIDT 75.18 48.38 0.99 22.40 4.15 -2.18
Net Profit 30.59 20.73 -1.85 9.48 2.26 -1.68
PBIDTM (%) 11.12 13.49 1.85 9.49 9.23 -2.84
PATM (%) 4.53 5.78 -3.46 4.02 5.03 -2.19
EPS 27.46 28.01 0.00 12.85 3.71 0.00
P/E 7.81 3.53 0.00 9.47 2.35 0.00
EV/PBIDT 6.56 3.54 50.78 6.33 3.43 -15.21
Equity 11.14 7.40 43.40 7.38 6.09 4.2
Dividend 20.00 10.00 0.00 40.00 0 0
Equity/sales 1.65 2.06 81.21 3.13 13.55 5.48
Source: Capitaline Database, Fairwealth Research
The company has highest sales among its peers i.e Rs. 675.89 crore. The industry P/E is 6.44 and the company is trading at a P/E of
7.81 on TTM Basis. The company has a EPS of 27.46 which is one of the best in the industry.

QUARTERLY ANALYSIS

Particulars (In crores) Dec’09 Dec’08 Var% Y-o-Y Sep’09 Var% Q-o-Q
Net Sales 193.59  124.05  56% 164.44  18%
Add: Other Income 0.29  0.04  625% 0.44  -34%
Total Income 193.88  124.09  56% 164.88  18%
Less: Expenditure 164.9  108.86  51% 141.01  17%
PBIDT 28.98  15.23  90% 23.87  21%
Less: Interest 4.82  7.83  -38% 5.79  -17%
PBDT 24.16  7.4  226% 18.08  34%
Less: Depreciation 4.27  4.25  0% 4.63  -8%
PBT 19.89  3.15  531% 13.45  48%
Less: Tax 7.11  1.89  276% 4.29  66%
PAT 12.78  1.26  914% 9.16  40%
EPS 11.47  1.13  915% 8.22  40%
CEPS 15.31  4.95  209% 12.38  24%
OPM% 14.97%  12.28%  - 14.52%  -
NPM% 6.60%  1.02%  - 5.57%  -
Source: Capitaline Database, Fairwealth Research
Riddhi Sidhi Gluco Biols has reported a 56.06% increase in the net sales to Rs 193.59 cr during the quarter ended on 31st Dec, 2009, as
compared to Rs 124.05 cr in the same quarter last year. The operating profit of the company improved by 90.28% to Rs 28.98 cr as against
Rs 15.23 cr during last year. The company has reported a massive jump of 914.29% in the net profit to Rs 12.78cr as against Rs 1.26cr
during the same quarter last year.
However on Q-O-Q Basis, the company improved its net sales by 17.73% to Rs. 193.59 crore as compared to Rs. 164.44 cr in the previous
quarter. The operating profit increased to Rs. 28.98 cr as against Rs. 23.87 cr. Net profit increased by 39.52% to Rs. 12.78 cr as against
Rs. 9.16 cr during the previous quarter.

   
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FINANCIALS OF THE COMPANY


PAST FIVE YEARS PERFORMANCE
Particulars (cr) 2008-09 2007-08 2006‐07  2005‐06  2004‐05 
Net Sales 530.68 332.09 332.65  229.86  187.69 
Stk adjustment 9.15 4.77 1.06  0.19  ‐1.83 
Other income 5.33 1.69 1.16  0.29  0.18 
Total Income 545.16 338.55 334.87 230.34 186.04
Less: Expenditure 481.73 283.33 279.74  197.29  162.12 
PBIDT 63.43 55.22 55.13 33.05 23.92
Less: Interest 27.17 13.12 11.73  11.9  10.92 
PBDT 36.26 42.1 43.4 21.15 13
Less: Depreciation 14.73 12.62 10.87  8.22  7.73 
PBT 21.53 29.48 32.53 12.93 5.27
Less: Tax 7.55 9.59 5.77  1.58  1.32 
Net Profit 13.98 19.89 26.76 11.35 3.95
Less: Extraordinary items 0.01 0.05 ‐0.23  ‐0.16  ‐0.02 
Adj. Net Profit 13.97 19.84 26.99 11.51 3.97
Equity Share capital 11.14 11.14 10.55  8.45  6.45 
EPS 12.55 17.85 25.36 13.43 6.12
Cash EPS 25.76 29.14 35.67  23.16  18.11 
Operating Profit Margins 11.95% 16.63% 16.57% 14.38% 12.74%
Net Profit margins 2.63% 5.99% 8.04% 4.94% 2.10%
Source: Capitaline Database
The top line of the company has been showing consistent growth rate. The bottom line of the company is not in accordance with that of
the top line due to high interest rate.
BALANCE SHEET
Particulars( In crores)  2008-09 2007-08 2006‐07  2005‐06  2004‐05 
Net Worth 185.27 176.82 146.38  83.29  63.82 
Loans- Term 146.49  151.37  130.38  92.6  88.81 
Loans - Working Capital 113.98 94.27 70.22  53.26  44.07 
Deferred Tax Liability 18.35 13.8 7.3  5.67  5.27 
Total 464.09 436.26 354.28 234.82 201.97

Net Block Including WIP 320.48  284.97  244.24  167.31  141.05 


Investments 0.15 0.15 0.15  0.09  0.09 
Net Working Capital 143.46 151.14 109.89  67.42  60.83 
Deferred Revenue Expenses 0.00 0.00 0.00  0.00  0.00 
Total 464.09 436.26 354.28 234.82 201.97
Source: Capitaline Database
The net worth of the company is increasing on a continuous basis. The term loans of the company have declined in the current year to
Rs. 146.49 crore from Rs. 151.37 crore

   
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Debt/Equity Ratio

The Debt-Equity ratio of the company


decreased from 3.62 in the year 2005 to
1.59 in the year 2009.

The Equity of the company increased


from Rs. 6.45 crore in the year 2005 to
Rs. 11.14 crore in the year 2009.

Source: Fairwealth Research 
Source: Fairwealth Research 

 Gross Sales

The sales turnover of the company has


increased on a consistent basis.

The company’s sales increased from Rs.


353.86 crore in the previous year to Rs.
544.62 crore in the current year.

The company’s sales are expected to grow


in the near future.

 
                                                                                                                                                                   Net Sales & PAT 
Source: Fairwealth Research

The company’s net sales increased from Rs


332.09 crore in the year 2008 to Rs. 530.68
crore by 59.8% in the year 2009. Whereas the
PAT decreased by 50.39% to Rs 13.98 crore
from Rs. 19.89 crore.

 
 
                                                                   
                                                                                                                               Source: Fairwealth Research 

   
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Comparison of the stock price of the company with Small Cap Index:-

The company’s stock price has been performing


in line with the Small cap Index. The stock price
has been rising with the Small Cap Index. 

Source: Fairwealth Research 
 
Industry Turnover Vs Company Turnover:-

The graph of the Industry turnover and that


of the company turnover is on growth path.
The Industry turnover in the year 2009 was
Rs. 1484.81 crore and that of the company
was Rs. 544.62 crore.
The company’s turnover is 36% of that of the
total Industry Turnover. 
 

 
Source: Fairwealth Research 
Book Value $ Equity

The company’s Book value has increased


from 134.08 to 143.12 in 2009.

Source: Fairwealth Research

   
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DIVIDEND PAYOUT
Year of Dividend PAT (Rs Cr) % of Dividend Dividend Yield%
2009 13.98 20 3.2
2008 19.89 30 1.4
2007  26.76  30  1.08 
2006  11.35  20  1.03 
2005  3.95  15  6.4 
Source: Capitaline Database

Ridhi Sidhi Gluco Biols Ltd is paying dividend from the last 5 years. The dividend yield for the company is in between 1 – 6.5.This
gives a positive signal of the management’s focus on shareholders wealth creation

Price to Book value

 
Riddi Siddhi Gluco Biols Ltd. has P/BV of
  1.51x at current market price of Rs. 216.15.  

 
 
eeeee                                                                                   EPS on TTM Basis
     Source: Fairwealth Research

                                     

Riddhi Siddhi Gluco Biols Ltd. EPS has been


rising on TTM basis from Q1FY10 to Q3FY10.
Same trend is expected to be followed in the
near future. 

 
Source: Fairwealth Research

   
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ANALYSIS & REPORT

Why to invest in shares of Riddhi Siddhi Gluco Biols Ltd.?

SECTOR:

The Indian corn starch industry has an estimated size of around Rs. 1800 crore per annum. There are few players in the
industry. The companies have small sized plants that are scattered around corn producing regions. India is the worlds’
seventh largest corn producer about 18.54 million tones produced annually with adequate raw material availability. The corn
wet milling industry registered a steady growth. Exports have been strong. Over the past 3 years, the industry has shown a
strong growth in exports, at approximately 18% constant annual growth. Corn refiners in India are recognizing the
importance of maize and are working with seed companies to improve crop yield via the biotech route in seed development.
Indian pharmaceutical companies are gearing up to become a major global player, not only in producing low-price generic
medicines but also as innovators in drugs and vaccines. It is growing at a rate of 9% per year. India has also emerged as
the fastest growing paper market in the world showing a 10 per cent growth in per capita paper consumption. Paper industry
in India is the 15th largest paper industry in the world. The apparel industry of India is the largest foreign exchange earning
sector, contributing 12% of the country's total exports.

COMPANY:

• The company is the largest wet corn miller in India.


• The company has a strong presence in its industry and has a cutting edge over its competitors to
source the main raw material i.e corn (maize) from the corn growing areas during season, store it with
the infrastructural facilities created to ensure uninterrupted operations of all its plants to ensure timely
and effective service to its customers.
• The company has strong financials and has a network of more than 8 marketing points across India and
has its presence in more than 25 countries in the world.
• The company has a market share of 36%.
• The company is the India’s largest corn miller with 1500 tonne daily capacity, producing a variety of
starches and derivative products.

FUNDAMENTALS:

• The company’s 90% revenues comes from Pan India and 10% from exports.
• In the year 2008-09, the net sales of the company increased by 59.8% from Rs. 332.09 crore to Rs. 530.68 crore.
• The debt equity ratio of the company is 1.58 in the FY09.
• The company has higher operating profit ( i.e Rs 75.18 crores) among its peers.
• The company’s vision is to grow at CAGR of 20% to achieve a rupees one billion turnover and touch a
million tonne annual production capacity in five years.

       Notes: Figures and graph sourced from www.bseindia.com , capital market and annual report (2008‐09). 
                                                                                 END 
 
 
 
 

   
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FUNDAMENTAL ANALYSTS DESIGNATION CONTACT NO.
0124 -3024862
Rajesh Gupta Chief Investment Officer Rajesh.gupta@fairwealth.in
Research@fairwealth.in
0124 ‐ 3024864  
Prakash Chandra Pandey AVP- Portfolio management
Prakash.pandey@fairwealth.in
0124 – 3024840
Tanisha jolly Research Associate
tanisha.jolly@fairwealth.in
0124 – 3024874
Varun Khanna Research Associate
varun.khanna@fairwealth.in
0124 – 3024840
Shashi Srivastava Research Associate
Shashi.s@fairwealth.in
0124 – 3024840
Shakti Rajpal Research Associate
Shakti.rajpal@fairwealth.in
0124 – 3024869
Suvarna Binjola Research Associate
Suvarna.binjola@fairwealth.in
 
Disclaimer:
This publication has been solely prepared for the information purpose and does not constitute a solicitation to any person to buy or sell a
security. While the information contained therein has been obtained from sources believed reliable investors are advised to satisfy
themselves before making any investments. Fairwealth Securities Pvt Ltd does not bear any responsibility for authentication of the
information contained in the reports and consequently is not liable for any decision taken based on the same. Further Fairwealth
Research report only provides information updates and analysis. All opinions for buying and selling are available to investors when they
are registered clients Of Fairwealth Investment advisory services. As a matter of practice, Fairwealth refrains from publishing any
individual names with its reports. As per SEBI requirements it is stated that, Fairwealth securities Pvt Ltd, and/or individuals thereof may
have positions in securities referred herein and may make purchases or sale while this report is in circulation.

   
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