Shares of Vidhi Specialty Food Ingredients hit a new high of Rs 213.55, up 13 per cent on the BSE in the intra-day trade on Monday, as buyers lined-up at the counter to buy the stock on expectation of strong demand for its products.
The stock has rallied 52 per cent in the past one week as compared to a 1.7 per cent decline in the S&P BSE Sensex. At 11:45 am, it was trading 10 per cent higher at Rs 208, as against a 0.62 per cent decline in the benchmark index. Trading volumes on the counter more-than-doubled with a combined 1.99 million equity shares changing hands on the NSE and BSE.
Vidhi Specialty Food Ingredients (formerly known as ‘Vidhi Dyestuffs Manufacturing Limited’) is a leading manufacturer of superior synthetic food grade colours with capacity of 300MT/month.
The company has a wide product range and offers world class colour solutions for varied applications in food & beverage, confectionary, pharmaceuticals, feeds, cosmetics, homecare, personal care, inkjet inks and salt free colors with products being distributed and consumed in over 80 countries across 6 continents.
According to the company, there are huge growth opportunities for the industry with limited players. Every year incremental demand of Rs 1,500 crore to Rs 1,700 crore is expected to generate globally for food colours.
“There is an upsurge in demand for food colors from various end-use industries, including food & beverages, bakery & confectionery, dairy products, meat & poultry, and seafood. The food colour market across the globe has been on a rise with more demand upsurge from the emerging markets and is expected to be higher than projected 6 per cent CAGR due to higher disposable income,” it said.
For October-December quarter (Q3FY21), the company’s revenue grew 47 per cent year on year (YoY) at Rs 79.3 crore, while profit after tax (PAT) jumped 36 per cent at Rs 10.5 crore on YoY basis. Ebitda margins for Q3FY21 stood at 19.6 per cent as compared to 20.4 per cent in Q2FY21 and 21.5 per cent inQ3FY20. Better product mix along with internal operational efficiencies and optimal utilizations, the company expect margin to improve going ahead
“On the back of a strong revival in demand post opening up of economy across the globe, there was a surge in demand for our products. We are optimistic of growth going forward on the back of new product development, newer customers addition and newer geographies penetration,” the company said.
The management believes that there is a robust demand for the company’s product in the market and demand-supply gap will exist with very few players in the industry and amid high entry barriers for the newer players to grab the market share. The company has also received the environment clearance for its new Dahej plant and has started civil construction; expect the plant to be operational in the next 12-15 months bringing in additional capacities to cater to the industry demand.