Fundamental Call On Dec08,08

Buy Jhunjhunwala VanaspatiWith Short as well as Long Term View
Co Name: Jhunjhunwala Vanaspati Ltd Reco: Buy
CMP: Rs 72 (Dec05,08)
Best Buy Level: Dip around Rs 65 (accumulate at or below this level)
Target Price: Rs 82-85 (1-3 months), Rs 120(12-18) months

Investment Rational:

1. Fundamentally, The company performance is quite consistant and it is registering very impressive growth in its Top Line ( Net Sales) and Bottom Level (PAT) of around 50% and 70% consequtively on average basis. It has EPS of Rs 48 (approx) so PE of 1.5 and BV = Rs 132.

2. 58% of its earnings comes from vanaspati oil and rest from soya, palm and Mustard oil. And, it has 35-40% market share in UP and Bihar. And, it has increased its market share over period of time. At the same time. the company has plans to increase its total capacity and to establish nes units in Bihar and West Bengal as well. Moreover, It has taken over a fertilizer comapany in Bihar to enter in Fertilizer segment.

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