Vadilal is a fairly significant player in the ice-creams, frozen yogurts and frozen fruits market. It's been traditionally Gujarat based company. The ice cream market in India about Rs 3,000 crore and about 60-70% is gone into the organized sector. Amul is the leader with about 35-40% market share and Vadilal and Levers after their acquisitions share about 22-23% each.
Vadilal has got a very strong brand equity in Western India. It's moved into Rajasthan. It's the biggest player. It moved into Delhi also, the biggest ice cream market in the country. The company did well. Last year they ended up with a EPS of about close to Rs 7. In terms of price earnings it's around Rs 17-18.
They have got strong expansion plans. It's a low equity capital of Rs 7 crore or something. The market cap sales ratio is very low compared to other FMCG companies. The brand power is not getting reflected in the share price.
The immediate trigger was the listing of the stock in the NSE a few days ago which gave it a sort of national presence and the stock went up sharply. But, even then, if you correct and after that Vadilal should be good.
Because right now people are moving to branded stocks, FMCG stocks etc, and in terms of valuations it's pretty low. There is some concern that it's got a bit of debt on its portfolio. But, probably it might do some fund raising at some point of equity because the promoters have a very large stake to bring down the debt.
The footprint is very strong and its moving in the Northern India market, the biggest market. And it should touch Rs 250 or so in the next 12-18 months.
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