report on sir shadi lal enterprise ltd

8/14/2019 Report On Sir Shadi Lal Enterprise Ltd.

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www.nift iews.comSTOCK REPORT- A VIRGINSUGARCOMPANY.UNTRACKED ANDUNKNOWN.

SIR SHADI LAL ENTERPRISES LIMITED

11250 TCD SUGAR PLANT IN 2 LOCATIONS.

2 MW COGENARATION PLANT.

40 LAKH GALLONS IML DISTILLERY.

MANAGEMENT HAS INCREASED SHAREHOLDING INLAST FEW QUARTERS USING CREEPING ACQUISITION.

IT IS TRADING AT A DISCOUNT TO ITS REPLACEMENTVALUE AT PAR WITH MOST SECOND RUNG SUGARMILLS IN UTTAR PRADESH.

Peter Lynch had once famously said he likes companies with

peculiar names. Sir Shadi Lal enterprises limited is one such

company. The company is a North India based sugar company

and is one of the oldest companies in the region with an operating

capacity of 11250 Tcd.

KEY STATS:-

Code : 532879

Market cap : 761mln

FY09 BV : 137.47

Total Debt :2402 mln

CMP :145

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TEAMSTOCKRESEARCHERS

Pvt. Ltd.

3 SUBHASHNAGAR CORNER,RAIYA ROAD,RAJKOT, Gujarat, 360007

www.niftyviews.com

CONTACT:09327744250

CST NUMBER: AADCT0544JST001

DATE:04.01.2010

VOLUME NO: 1/2010

ISSUE NO:39.


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SSLEL, a company promoted by Sir Shadi Lal

in the year 1933 is a partially integrated sugar

manufacturer and is engaged in the production

of sugar and alcohol. It currently operates two

units, one located at Shamli Distt.

Muzaffarnagar,UP (6250 TCD (Tones

Crushed Per Day) and second unit located at

Unn, Distt. Muzaffarnagar (4,000 TCD-

Licensed). The Unn Unit was acquired by the

company in September 2007.

The company also has two distilleries (one at

Shamli and another at Pilkhani, District

Saharanpur) with combined capacities of 40

lakh gallons per annum. To integrate further

SSLEL has also installed Extra Neutral

Alcohol (ENA) plants and 1 MW bio-gas

based power plants at both the distilleries, in

H108.

HEADLINE

The 11250 Tcd plant is valued at 337 crs

based on replacement methodology. The

company also owns two distilleries of

combined capacity of 40 lakh gallons along

with a 1 Mw bio gas plant in each distillery.The

distillery,power plant along with the sugar plant

have a projected replacement value of more

then 400 crs. Since the company is a 77 years

old company historical valuations shouldnt be

used as benchmark.

Bajaj hindustan with a number of its plants in

Northern Uttar pradesh and two plants in

Muzzafarnagar district is trading at a valuation

higher then replacement value. Over a period

of time these valuations would converge.

The company acquired the assets of Monnet

sugar in 2007 by purchasing its 4000 tcd sugar

plant for an undisclosed amount. Since thepurchase was during the slump of the sugar

Cycle the company has tremendously

benefitted from the acqusition.


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When one closely scrutinizes the

companies accounts one can observe the fact

that the company is virtually debt free.

Investors can question the fact that

the company owes long term and short term

debt of 2402 mnl rupees. Most of the debt has

been used to maintain a sugar inventory of

2200 million rupees. If one adjusts the

quarterly profits of last two quarters the

company is now almost debt free.

The evidence of the above view can also be

concluded from the fact that the company has

made a net interest payment of 38 million as

compared with 56 million (QoQ) and 68 million

(YoY). This translates to a saving in Eps of 6

rs per share per quarter on an Yoy basis.

Investors should note that the company in

March 2009, carried an inventory of more then

983708 quintals of sugar at an average cost of

19.02 per kg.

HIDDEN VALUE

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The company can benefit tremendously from

the current bull run in sugar peices.Refer the

sugar analysis on www.Niftyviews.com dated

04.01.10.

The promoters of the company have used

the creeping acquisition route to raise there

stake by 0.62% in last four quarters.

The stock can be held in the long term

portfolio for sustainable gains.

MANDATORY DISCLOSURES:This document is for information only and is meant for the use of the Recipient & not for circulation.

The information contained in this document has been taken from publicly available information tradeand statistical services & other sources. While the information contained herein is from sources believed to bereliable, we do not hold ourselves responsible for its Completeness andaccuracy. All opinions and estimates included in this report constitute our judgment as of this date and are

Subject to change without notice. Investors are expected to use the information contained in this report at theirown risk. This report is not and should not be construed as an offer or the Solicitation of an offer to buy or sell anysecurities. TEAM STOCKRESEARCHERS and its affiliates may act as market maker or have assumed an underwriting

position in the securities of companies discussed herein and may sell them to or buy them from

customers on a principal basis..


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Profit and Loss

You can view particular company's Income statement for a period of 5 years. SOURCE: TSR RESEARCH/ COMPANY

(Rs in Cr.)

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05

Income :

Operating Income 320.13 172.47 252.60 290.86 270.65

Expenses

Material Consumed 224.48 146.74 193.45 190.70 183.49

Manufacturing Expenses 15.92 14.94 12.62 21.12 15.41

Personnel Expenses 28.84 25.16 20.66 24.14 20.19

Selling Expenses 5.71 3.41 9.97 8.39 7.72

Adminstrative Expenses 5.97 6.50 5.53 4.90 4.34

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00

Cost Of Sales 280.92 196.76 242.23 249.25 231.15

Operating Profit 39.22 -24.28 10.37 41.61 39.50

Other Recurring Income 1.95 4.16 1.76 1.37 1.05

Adjusted PBDIT 41.16 -20.13 12.13 42.98 40.55

Financial Expenses 25.03 17.80 4.19 3.43 4.70

Depreciation 16.44 11.80 4.83 4.23 4.04

Other Write offs 0.00 0.00 0.00 0.00 0.00

Adjusted PBT -0.31 -49.72 3.11 35.33 31.81

Tax Charges 5.25 -12.29 1.54 11.54 11.06

Adjusted PAT -5.57 -37.44 1.56 23.78 20.75 Non Recurring Items -0.15 0.29 -0.11 -0.23 -0.16

Other Non Cash adjustments 0.03 0.00 0.37 0.08 0.00

Reported Net Profit -5.69 -37.15 1.83 23.63 20.59

Earnigs Before Appropriation -5.69 -37.15 1.83 23.63 20.59

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