Agri-Tech (India) Ltd: Undervalued
stock
(NSE Code: AGRITECH, BSE Code: 537292) (CMP: Rs.60) (FV:
Rs.10)
Agri-Tech (India) Ltd
(Agritech) is a group company of the Aurangabad-based Nath Bio-Genes, which was
demerged from Nath Seeds Ltd in 2004 to focus on agri sector activities.
The Company’s value
emerges from the following 3 verticals
1) Agri-Tech Holds holds 15.6 lacs shares of Nath Bio Genes valued at
approx 51.5 cr.
2) Agri-Tech owns 500
acres Land bank near Paithan in district Aurangabad, the market value of which
is Rs.110 crore (valued as per the recent sell transaction of 90 acres for
Rs.20.4 crore by the company in Q4 FY16.
3) Agritech holds 66%
stake in Paithan Mega Food Park Pvt Ltd (PMFP), along with 34% stake with Nath
Bio-genes. Agritech’s valuation of PMFP works out to approximately Rs.70 crore
The project is
supported by the Government of India (GoI) for the State of Maharashtra. Mega
Food Park (MFP) is a concept and scheme developed by the Ministry of Food
Processing Industries (MoFPI), Government of India with the objective of
providing adequate infrastructure for food processing industry to enable fresh
investments into the food processing and also enhance employment opportunities
in rural areas. MFP to have a Central Processing Centre (CPC) supported by
Common infrastructure and Primary Processing Centres (PPC) and collection
centres. Facilities like warehousing, cold storage, etc. are expected to become
operational in the next financial year.
Agri-tech India has
equity capital of just Rs.5.94 crore supported by reserves of around Rs.41.95
crore. Market Cap of the company is just
35.8 Cr, it becomes a serious re-rating candidate as the
total valuation from the 3 verticals totals around Rs.230 crore while the
Company’s market cap just Rs.35.8 crore and it is a debt-free company.
The promoters hold 46.3%
of the equity capital, 17.7% stake is held by HNI’s and Corporates. Book Value of the company works out to be Rs 80.63 and trades at 0.75
Price/Book. In Q1FY18 it posted a profit of Rs 16.18 cr against loss of 14 lacs
in Q1FY17. The profit is due to sale of land, so it is due to other income otherwise it would have posted loss.
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