[T.S.R:16737] Riddhi Siddhi Gluco Q3FY11 Results Update --- Surprise Continues --- Surpasses even the most Optimist Expectations

Riddhi Siddhi Gluco announced Q3FY11 results today which surpassed
even the most optimist expectations by quite a wide margin especially
on the bottomline front. Given below are the brief highlights of the
results of Q3 as well nine months ending 31st Dec. 2010.

(1) Company reported a Q3FY11 topline of Rs. 267.15 cr. which entails
to a QoQ sequential growth of 28.05 % and a YoY growth of 37.95 %.

(2) Company reported an Operating Profit of Rs. 60.20 cr. which
entails to a QoQ sequential growth of a whooping 73.28 % and a YoY
growth of huge 145.21 %.

(3) Q3FY11 Net Profit of Riddhi stood at Rs. 41.91 cr. which is a
sequential QoQ growth of 70.36 % and a YoY growth of an astonishing
228.19 %.

(4) For nine months ending 31st Dec. 2010, company has reported a
topline of Rs. 676.44 cr. which is a growth of 31.43 % over the same
period last year.

(5) For nine months ending 31st Dec. 2010, company has reported
Operating Profit of Rs. 134.43 cr. which is a growth of 134.77 % over
the same period last year.

(6) For nine months ending 31st Dec. 2010, company has reported a Net
Profit of Rs. 97.68 cr. which is a growth of huge 260.70 % over the
same period last year.

(7) Company has reported an EPS of Rs. 87.41 for nine months ending
Dec. 2010 on current equity capital of 11.13 cr. which is to be
reduced because of a scheme of arrangement with Roquette. Hence, on
such reduced equity capital post scheme of arrangement, the EPS for
nine months ending Dec.2010 works out to be Rs. 103.

(8) Annualised EPS for FY11 based on the results so far announced, on
the current expanded equity capital works out to be Rs. 119.6 whereas
EPS for FY11 on the reduced equity capital post restructuring scheme
becoming effective, works out to be Rs. 141.

Outlook on the Company :

The robust results declared by the company for Q3FY11 singnify a
great management of business by the company as also its undisputed
leadership of the Starch & Starch Derivatives sector. At the current
rate of Rs. 332, it discounts current FY11 EPS (post scheme of
restruc.) by just 2.35 which makes it a great value Buy at current
levels with an expected safe upside of atleast 86 % by Q1FY12. If the
company would have not sold its running business to Roquette, then
based on the current results it would have easily got a P/E of atleast
7.5 which would have made its target price at Rs. 1055. However,
considering the fact that running business is already sold to Roquette
but management has acted shrewdly by retaining FY11 profits with the
listed entity which will mean an addition of atleast Rs. 125 cr. to
the cash likely to be received by the company from Roquette. Hence,
based on a 30 % discount to the likely cash on the books of the
company by Q2FY12, it hardly has any downside left at current rate and
will inch up to trade between Rs. 550-618 by Q1FY12 which makes it a
Safe Value Buy in current uncertain markets.

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