Shri Bajrang Alliance

Shri Bajrang Alliance

A budding FMCG company at throwaway price 

(BSE 526981)

CMP: Rs 52

From a steel making plant in Chhatisgarh, Shri Bajrang Alliance Ltd (SBAL) has ventured into FMCG, manufacturing ready to eat frozen foods under brand name GOELD.

Goeld products are manufactured at state-of-the-art, 100% vegetarian kitchens using a robust supply chain of the freshest ingredients and a world-class freezing technology. With no added colours, flavours or preservatives, offering exceptional taste, quality and variety.

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Key Financials:

PE Ratio: 3.4

Debt/Equity: 0.4

Promoter holding: 60.1%

Price/Book value: 0.41

Sales growth last three years: 32.7%

ROIC: 27.9%

Market Cap: Rs 47 Cr

Sector growth drivers:

In recent years, the demand for frozen foods has shot up in India, following the rapid increase in the number of supermarkets and retail stores, along with proper refrigeration facilities. The frozen foods market in India was valued at INR 85.27 billion in 2019 and is expected to reach INR 192.96 billion by 2024, expanding at a compound annual growth rate (CAGR) of ~17.74% during the 2019-2024 period.

Several government schemes like Integrated Development of Horticulture (MIDH) and Pradhan Mantri Kisan Sampada Yojana (PMKSY) have provided financial support for building and enhancing new cold storage facilities in India. The advancement in cold chain infrastructure has further supported the supply and distribution of frozen food products in tier I cities. This has spurred growth in the country’s frozen food market.

Improved shelf-life and packaging of frozen foods has further fueled market growth.

With busy lifestyles and rising disposable income, frozen ready-to-cook (RTC) and ready-to-eat (RTE) products are becoming consumers’ preferred choice.

This category is still in its nascent stage in India as consumer penetration in the category is approximately only 1% which makes it more interesting since it presents a great opportunity to exploit in the Indian market.

Corona virus having affected the restaurant business, has left the public in fear of ordering in thus, adding to the picking momentum of frozen foods. The latest trend that can be seen is that since there is no school, children’s demand for Maggi and pasta along with parathas has increased multifold.

Further, many bachelors and students are stranded in PGs and do not have access to a kitchen to prepare meals.

Post-Covid-19, frozen food brands shall get more acceptance from consumers and the consumer penetration into the category is going to thus rapidly increase in India. The same trend is now visible not only in the Indian market but also in all the Asian markets.
However, Covid-19 is not the only factor that has contributed to growth of the frozen food category in India. From the influence of Western culture having changed food habits and lifestyles, to the booming e-commerce sector which offers online platforms that have a high product visibility compared to traditional platforms, have all facilitated greater penetration of frozen food products in India.

SBAL growth drivers:

Low debt

Plant has started

Low competition

Benefit of early entrant

Close access to raw materials

SBAL in news –

https://www.bseindia.com/xml-data/corpfiling/AttachHis/fbd22e54-1782-4140-8eae-f14f40d15946.pdf

https://www.bseindia.com/xml-data/corpfiling/AttachHis/9e0f4de0-6d3b-47c7-bec0-5bb879d29c5f.pdf

 

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