Hind Industries - Rs.36.00

Established in 1973, Hind Industries Ltd. (HIL) was promoted by Gulab Rai Kohli and Sardul Singh Uberoi and was taken over by Sirajuddin Qureshi in 1988. Since then, HIL has grown by leaps and bound to emerge as a leading manufacture and exporter of fresh, chilled and frozen sheep, buffalo and goat meat and meat products. Under the brand names ‘Eatcco’ and ‘Sibaco’. Ironically, HIL has a subsidiary Hind Agro Industries, which is 4 times its size and has a turnover of more than Rs.350 cr. HIL exports its products to more than 45 countries including Bahrain, Egypt, Indonesia, Iran, Jordan, Kuwait, Lebanon, Malaysia, Mauritus, Oman, Phillipines, Qatar, Saudi Arabia, Thailand, UAE, Yemen, East and West African countries and CIS countries.

Along with its subsidiary, HIL has one of the most modern abattoir-cum-meat processing plant of Asia at Aligarh in UP which is approved by the Agricultural and Processed Food Products Export Development Authority (APEDA). It is the only group with unique facilities to slaughter animals, which have been bred and reared as per the strict guidelines set by O.I.E., Paris. Besides the ‘halal’ process is strictly carried out by Islamic Shariat procedures and is supervised by a representative of the Jamiat-Ulema-I-Hind, who issues a certificate to that effect. Although HIL has an installed capacity of 25,000 TPA, it is operating at around 50% capacity utilization. This means it has the potential to double its turnover without any further investment. As only a few major players exist in the meat export industry, the company faces very little competition and India with its rich livestock wealth offers major scope for development for the meat export industry.

For future growth, the company is setting up an integrated animal husbandry, rearing and meat processing project in West Bengal at an investment of around Rs.106 cr. for which the government has already allotted 500 acres of land. In the first year of operations HIL estimates to breed and rear 5,000 Murrah buffaloes and 10,000 female black Bengal goats and the meat produced will be sold in domestic and export markets. For FY06, it posted an EPS of Rs.4.50 and is expected to declare dividend in the coming week. For the June’06 quarter, its sales shot up by 85% to Rs.36 cr. whereas profit zoomed 450% to Rs.1 cr., recording an EPS of Rs.1.20 for the quarter. For FY07, it may clock a turnover of Rs.100 cr. with a net profit of Rs.5.50 cr. i.e. EPS of Rs.6 on its equity of Rs.8.64 cr. As the share price has run up sharply in the recent past, investors are advised to buy it at sharp declines with a price target of Rs.60 in 12-15 months. However, equity dilution is a cause of concern in the near future.