ICRA Online has assigned the Fundamental Grade 3 to Sanwaria Agro Oils Ltd (SAOL). The Fundamental Grade ‘3’ assigned to SAOL implies that the company has “good fundamentals” relative to other listed securities in India. The grade factors in the established presence of SAOL as one of the leading domestic soya bean processors; favourable domestic demand outlook for edible oils; healthy operating efficiency, upside potential from entry into value-added soya products and increasing revenue share from branded oils. While assigning the grading ICRA Online notes that the profitability of SAOL is vulnerable to adverse movement in international prices of edible oils and domestic agro-climatic conditions given its high exposure to the low margin trading business. Also the business is exposed to regulatory risks such as changes in duty differential for edible oils and export duty on deoiled cakes.
About Sanwaria Agro Oils Limited:
Promoted by Mr. Ram Narayan Agarwal in 1991, SAOL is one of the leading processors of soya bean seeds and among the seven major edible oil companies in India. The vertically integrated facilities of the company include crushing and processing of soybean for extraction of soy oil and soy meal; and refining of edible oils. SAOL has a significant presence in trading of deoiled cakes and foodgrains, whose revenue contribution was around 47% in 2009-10.
About ICRA and ICRA Online:
ICRA Limited was set up in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional investment information and credit rating agency. Today, ICRA and its subsidiaries, along with their subsidiaries, together form the ICRA Group of Companies. ICRA is a public limited company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange. ICRA is an associate of Moody’s Investors Service, who is also its largest shareholder.
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For a detailed equity research report on Sanwaria Agro Oils Limited, visit our website www.icra.in