Sukhjit Starch & Chemicals Ltd Sector Industry

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Brian Pitts
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1 Page 1 of 5 Company Profile Sukhjit Starch & Chemicals Ltd (SSCL) was registered and incorporated in Punjab on March 16, It is a starch manufacturing company. The company s top management includes Mr. S.C. Jindal, Chairman; and Mr. Inder Krishan Sardana and Mr. Kuldeep Krishan Sardana, as the Managing Directors. bout 60.3% of the company s shares are held by promoters group, while the rest of the shareholding lies with the institutional and noninstitutional shareholders. Stock Price Last Close Price (01/02/2016) Market Cap (Cr.) (29/01/2016) Price in Rs. 52 Wk High/Low / vg. Volume (1 Mo) (Rescaled to 100 for ease of comparison) Its head office and registered office is located in Punjab. The company has three plants located in Nizamabad (Telangana), Malda (West Bengal) and Himachal Pradesh. During the FY 2015, the company employed 1134 permanent employees. Business Overview SSCL is a starch manufacturing company. The company is engaged in developing, manufacturing and distribution of maize starch, dextrines, liquid glucose, malto dextrine, dextrose monohydrate, dextrose anhydrous, sorbitol and related bye-products. It serves food and drink industry, paper and board industry, personal care and pharma industry and animal nutrition and pet foods. The company operates its business in four operating segments Starch and Derivatives, Readymade Garments, Leasing and Hire Purchase Financing and Manufacturing of heavy Machinery. major part of the company s revenue was from the Starch and Derivatives segment. In FY 2015, the company s sales has increased from INR 509 crores to INR 534 crores due to lower prices of some finished goods and disruption of operations at Nizamabad unit for about a month. The expansion of Himachal Pradesh unit has been completed and its increased production with enhanced capacity utilization of Malda Unit will increase its ranking by over 10% with reasonable profitability. Financials Revenue Gross Margin % Operating Income Operating Margin % Diluted EPS Book Value Per Share Operating Cash Flow Capital Expenditure Free Cash Flow Profitability verage Values unless stated Return on ssets % Return on Equity % sset Turnover Net Margin % Financial Leverage Financial Health except Debt/Equity (Ratio) Long Term Debt Total Equity Debt/Equity Working Capital Report as of 02-Feb Initiative of the BSE Investors Protection Fund Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.

2 Page 2 of 5 Income Statement Total Revenue Cost of Revenue Gross Profit Operating Expense Operating Income Pre-tax Income Tax Provision Minority Interests Balance Sheet Stock Holders Equity Long Term Debt Total Non-Current Liabilities Payables Total Liabilities Net PPE Goodwill and other Intangible ssets Total Investments Total Non-current ssets Trading and Other Receivables Inventory Cash and Cash Equivalents Total ssets Cash Flows Depreciation and mortization Change in Working Capital Operating Cash Flow Capital Expenditure Investing Cash Flow Net Common Stock Issuance Net Issuance Payments of Debt Cash Dividends Paid Financing Cash Flow Changes in Cash Report as of 02-Feb Initiative of the BSE Investors Protection Fund Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.

3 Page 3 of 5 Financial Performance In FY 2015, SSCL s total revenue grew by 4.9% to INR crores versus a year ago. The company registered an operating income of INR crores, an increase of 47.1%, due to which there was an increase in operating margin by 183 basis points to 6.37%. The net profit of the company stood at INR crores, registering an increase of 44.6%. The increase is due to higher sales and low raw material costs and operational efficiencies. Revenue Growth Key Risks Price fluctuation, fall in prices of food products, seasonal changes and climatic conditions and demand and supply factors are the threats to the company. Other concerns /risks include lower demand for company's products due to slow economic recovery and margin risk. Gross Margin Competitors Sukhjit s key competitors include Gayatri BioOrganics and nil Ltd. Gayatri BioOrganics is into the manufacturing of starch, modified starches, liquid glucose, sorbitol, and its allied products, and trading in maize in South India. Its registered office is located at Hyderabad, Telangana and the production units are located in the District of Medak and East Godavari in ndhra Pradesh. In FY 2015, Gayatri BioOrganics' revenues grew by 19.5% to INR crores versus the last year. The operating incomes for the company rose by 257% to INR 4.82 crores versus last year. nil is engaged in manufacturing and marketing of starches, starch derivatives, and specialty starch products to industries, including textile, paper, adhesive, pharmaceuticals, food and beverages, chemicals and animal feed industry. It exports its products to Middle East, Far East countries, Japan, Sri Lanka, Bangladesh, South frica and many other frican countries. In FY 2015, the total revenue of the company grew by 17.5% to INR crores compared to previous year. The company registered an operating income of INR crores, an increase of 15.4%. Operating Margin Report as of 02-Feb Initiative of the BSE Investors Protection Fund Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.

Page 4 of 5 Industry Overview The global modified starch market is driven by an increasing demand for healthy, nutritious, and convenience food products.

4 Page 4 of 5 Industry Overview The global modified starch market is driven by an increasing demand for healthy, nutritious, and convenience food products. Modified starch allows modifying of basic properties of native starch and obtaining certain functional properties to fit a wider range of industrial applications in food and beverages, paper, textile, pharmaceuticals, pet food, soap, laundry, and cosmetics industries. vital part of any product designer s toolkit, modified starch provides a variety of functionalities as thickeners, texture agents, fat replacers and emulsifiers. Due to the sophisticated technology available, the ingredients can be fine-tuned to meet most formulating trials. The industry needs to produce 15-20% p.a. for next ten years to reach a reasonable level of consumption. Maize starch is also going to be an important ingredient in biodegradable plastic packaging. In India, the Starch industry consumes, close to 12% of the total maize production which is not very high. The total maize production in India is around 25 Million Tonnes against global production of 960+ Million Tonnes. U.S.., rgentina, Brazil and Ukraine produce about 80% of the total maize production and appear to be the major consuming and exporting countries. Price/Earnings Trailing Returns Quarterly Results except EPS (Rs.) Revenue Other Income Total Income Expenditure Interest PBDT Depreciation PBT Tax Net Profit Equity EPS CEPS OPM (%) NPM (%) *Standalone figures Return on Invested Capital (ROIC) Report as of 02-Feb Initiative of the BSE Investors Protection Fund Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.

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