The shares of this consumer FMCG company hit a 52-week high and clinched 20 percent upper circuit after reporting net profit growth of 844 percent year-on-year.
Share Price Movement
In Wednesday’s trading session, the share price of Modi Naturals Ltd. reached a 52-week high of Rs.343.4 per share and hit a 20 percent upper circuit from its previous close of Rs.286.2 apiece.
Rationale for the Rise
Modi Naturals Ltd. has experienced significant financial growth, leading to a notable surge in its share price.
For the quarter ending June 2024, Modi Naturals reported a total consolidated revenue from operations of Rs.147.65 crores, marking a substantial 76 percent increase from Rs.83.7 crores in the same quarter of the previous year. This also represents a 23.24 percent rise from Rs.119.8 crores reported in Q4 FY24.
Profit After Tax (PAT) of the company also demonstrated remarkable growth, increasing by 844 percent year-over-year to reach Rs.7.46 crores in Q1 FY25, up from Rs.0.79 crores in Q1 FY24. Moreover, PAT showed a significant improvement of 492 percent compared to Rs.1.26 crores in Q4 FY24.
Margins also saw significant improvement, with Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rising by 436 percent to Rs.13.26 crores in Q1 FY25 from Rs.2.47 crores in Q1 FY24. The company maintains a strong current ratio of 4.37 and a low debt-to-equity ratio of 0.63.
Management Commentary
Commenting on the performance, Mr. Akshay Modi, Joint Managing Director, of Modi Naturals Ltd., said, “We are pleased to announce 76 percent YoY revenue growth at the consolidated level for Q1FY25. This performance was achieved due to improved efficiency in the ethanol division coupled with green shoots in our consumer division.
The shift in our product mix, along with reduced A&P (Advertising & promotional) spending, has contributed to higher EBITDA margins. We aim to enhance our A&P investment in the future to achieve higher growth.
Extensive Market Reach
Modi Naturals Ltd. has an extensive market presence, operating through over 450 distributors, more than 3,000 modern retail outlets, and direct reach stores exceeding 50,000. The company also boasts three manufacturing units.
Business Verticals
Modi Naturals Ltd. has three business divisions, a consumer division, a Bulk business division, and an Ethanol division. The company is the only player producing multi-source olive oil in the market.
Expansion Plans
In the ethanol business division, the company has received approval for a 210 KLD (Kilo Liters per day) distillery and plans to invest approximately Rs.250 crores over the next two years.
The first phase, involving the completion of a 130 KLD capacity, is expected to be finished within a year with an investment of Rs. 150 crores. Commercial production for this project was commenced in Q3 FY24.
Shareholder Composition
As per the shareholding pattern of June 2024, the Promoters hold a 69.09 percent stake in Modi Naturals Ltd., while Retail Investors hold the remaining 30.91 percent stake in the company.
Company Profile
Modi Naturals Limited is an India-based company, engaged in the business of manufacturing and marketing oils and de-oiled cakes. The company’s brands include Oleev Go Beyond, Olivana Wellness, Pipo Mix In Popcorn, Rizolo, and Miller Canola Oil.
Written by – Siddesh S Raskar
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