agro tech foods limited

Company Profile

Agro Tech Foods Limited (ATFL), established in 1986, is engaged in the business of marketing food and food ingredients to consumers and institutional customers with major focus on branded edible oils, branded foods and sourcing. ATFL is a 48% subsidiary of ConAgra Foods Inc. of USA, which is one the world’s largest food company. ITC Limited, its erstwhile promoter holds 17% currently. Sundrop, Crystal, Rath and Act II are some of the Company’s brands. It has a dominant market share and value leadership in the premium refined oil segment. ATFL’s aim is to be an innovative food company with targeted sales of Rs15bn, a profit of Rs500mn with ROIC of 14%+ by FY 2010.

During, FY07 sales of ATFL increased by 11% to Rs10.38bn and net profit jumped 2.5 times to Rs161mn. OPM stood at 2.34%. Recently, Income Tax Appellate Tribunal, Hyderabad has allowed the Company's appeal against the levy of capital gains tax on slump sale of Mantralayam undertaking of Rs128.70mn for the assessment year 1997-1998 Key Triggers New focus on high margin foods: ATFL is focusing on growing its high margin snack food business. Leveraging on the popularity of its Act II popcorn brand, ATFL has launched of new products - ACT II Corn Chips & Act II Potato Popz at attractive price points. It has also launched Lamb Weston French-Fries. A new product - Healthy World sugar control ‘Aatta’ has been recently launched. Long term clinical trials have shown that there is a reduction in the increase in Post Prandial (PP) / after meals sugar levels by more than 25% over time, if the atta is taken as part of the usual diet. The company aims to widen its product availability in over 400 locations across the top 14 towns, up from its current 120 locations. Price Breakout: ATFL has given a strong weekly price breakout accompanied with strong volumes. Further, Relative Strength Index (RSI) on a weekly basis has given an over 5 year’s breakout support the strong positive momentum in the stock. .