Executive Summary
Kriti Nutrients Ltd. (KRITINUT) is a non-GMO soya-based product manufacturing and processing company in Central India. The company has recently seen a surge in its stock price, reaching an all-time high of Rs. 150.3 on August 16, 2024. This growth can be attributed to several factors, including a strong presence in the refined oil and vanaspati industry, consistent financial performance, and low debt levels. However, there are also some concerns about the company’s recent sales growth, which has been negative.
Company Description
Kriti Nutrients Ltd. is a part of the Kriti Group and manufactures a variety of non-GMO soy-based products. Their product portfolio includes branded refined soybean oil, value-added protein-based products, soya protein, and soya lecithin for industrial users. They also package and brand edible refined oil for retail consumers under the brand name “Kriti.”
Financial Performance
- Positives:
- Reduced debt: The company is nearly debt-free, which is a positive sign for its financial health.
- Strong profit growth: Kriti Nutrients has delivered good profit growth of 21.7% CAGR over the last five years.
- Low expenses: The company spends less than 1% of its operating revenues on interest expenses and 2.74% on employee costs.
- High return on equity (ROE): The company’s ROE of 25.66% for the year ending March 31, 2024, outperforms its 5-year average of 18.45%.
- Negatives:
- Poor sales growth: Despite strong profitability, Kriti Nutrients has delivered a poor sales growth of 7.12% over the past five years. This recent decline in sales is a cause for concern.
- Low P/E ratio: The company’s P/E ratio of 16.9 is lower than the industry average, which could indicate that the recent stock price increase may not be sustainable.
Recent News
- Kriti Nutrients’ stock price has reached an all-time high, outperforming the sector and market averages.
- The company is benefiting from its strong presence in the refined oil and vanaspati industry.
- Some analysts believe that there could be upside potential for the stock price, but there are also concerns about the company’s recent sales growth.
Investment Thesis
Kriti Nutrients is a company with a strong financial position and a history of profitable growth. However, the recent decline in sales growth is a concern. Investors should carefully consider this risk before investing in Kriti Nutrients stock.
Here are some additional factors to consider before investing in Kriti Nutrients:
- The overall health of the Indian economy and the edible oil industry.
- The company’s plans for future growth, including new product development and market expansion.
- The competitive landscape of the industry.
Disclaimer
I am not your financial advisor and this is not financial advice. Please do your own research before making any investment decisions.
