Wednesday, April 15, 2015

Rasoya Proteins Ltd: Update
Rasoya Proteins Ltd is likely to have Low Levels of Operations in Solvent Extraction, due to inadequate supply of Soya Seeds till September, 2015, when the new crop will come up. 

Due to this adverse situation, the company has decided to minimize its operations of its solvent division and oil refinery division, to cut down on the operating costs. This will though reduce the turnover, but the company is expected to show some profit in the following quarters. 

Moreover, in absence of the full-scale operation in the main Solvent Extraction Plant and Oil Refinery Division, the company has started to focus more on the export market. Last year the export turnover, was around 30% of the sales and in FY15 too, the management hopes, to at  least maintain the same, if not increase it. 

However, the silver lining is that: inadequate supply of seeds has not affected the manufacturing activities of the Fish Feed Division and Power Lecithin Division--both will be EBIDTA accretive in the coming days. The company has already started to revamp its operations in its Aqua Feed Division. 

Moreover, the company has started to widen its marketing network from Andhra Pradesh to other states such as West Bengal and Orissa. 

In such a situation, the investors are suggested to buy this sure shot hot pick at the CMP of Re.0.55 (NSE) and Re.0.57 (BSE) and keep holding till September, 2015 for some superb gains. I am expecting a target of Rs.5 (which means more than 8 times the CMP of Re.0.55/0.57) by the end of September, 2015. 
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