Flex Foods - Rs.27.50

Incorporated in 1990, Flex Foods Ltd (FFL) is part of the well-known Flex Group. It is in the business of agro based value added food products catering to international markets mainly in Europe, USA, Canada and Middle East. Today, the company is one of the major producers of Freeze-dried & Frozen products in the country. It offers a wide range of Vacuum Freeze Dried, Air-Dried, Frozen and IQF (Individually Quick Frozen) product range of mushrooms, herbs, spices and fruits / vegetables, meeting strict quality & hygiene standards. Canned button mushrooms in various shapes and sizes is also manufactured and sold under the brand name ‘Chef’s Choice’. Recently, the company introduced a new range of frozen and freeze dried culinary herbs for the export market.

FFL can boast of world class manufacturing facilities with state-of-the-art technology, good management practices (GMP) & quality systems. The processing infrastructure includes the most modern plant & equipment from leading technology providers i.e. M/s Niroa’s, Denmark; M/s Non, Holland; M/s Binder, Germany & Eurotex, UK along with others from leading Indian companies. The plant can process upto 20000 MTA of fruits & vegetables per annum in the form of freeze dried, frozen, IQF, air-dried and canned products. The facilities have been certified for Kosher and HACCP standards. In order to achieve the right quality of finished products, most of the input materials including mushroom, herbs and other fruits & vegetables are grown under the supervision of in-house experts making it a fully integrated producer. Besides, a captive mushroom cultivation unit with an annual capacity of 2000 MTA is fully equipped with international quality monitoring techniques and best storage facilities to ensure that the fresh & hygienic inputs are always available to the processing units. Due to the rising demand for frozen food products in international markets, the company has recently expanded and set up a Air dried (Dehydrated) and Frozen (Individually Quick Frozen) facilities for mushrooms, herbs, fruits & vegetables at its existing site at Dehradun at an estimated cost of Rs.28.50 cr.

The Indian mushroom industry is geared for considerable growth in production over the next few years as the export demand escalates. The Middle East, Africa, East European countries etc. are still growing markets for Indian mushrooms and are yet to be tapped. For FY05, company’s net Sales remained flat at Rs.25 cr. but its NP jumped 42% to Rs.8 cr. due to lower tax provision. For FY06 it can report Sales of Rs.30 cr. and NP of Rs.7.50 cr. which means an EPS of Rs.6 on its current equity of Rs.12.44 cr. Investors can accumulate this scrip at declines with a price target of Rs.50 (80% appreciation) in 12~15 months.