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Shares of Vadilal Industries have surged by 13% to Rs 490, extending the past two-day rally on the NSE, on expectations of better margins due to lower raw material prices.
In the past three trading sessions, the stock of ice cream maker has zoomed 40% from Rs 350 on April 24, compared with 1% fall in the CNX Nifty.
Milk constitutes roughly 20% of the cost of raw material for ice creams, while sugar is around 2-3%, fat around 18% and the remaining are ingredients like cocoa, fruits, nuts, vanilla etc.
According to Business Standard reports, Ice cream makers, say that raw material prices on the whole would be down by about 7% this summer, boosting their margins. CLICK HERE TO READ FULL REPORT.
Meanwhile, according to an Antique Stock Broking report dated April 13, 2015, the promoters have been planning to merge Vadilal Industries and Vadilal Enterprises, the mandate for which has already been awarded, with an intention to exit from non-core business like frozen foods and gas. The company’s frozen foods business valued is at Rs 60 crore and it plans to pare debt with the sale proceeds.
Post merger and the sale of non-core assets, the balance sheet would look healthy and return ratios would improve (around 15% RoIC (return on invested capital) at peak capacity utilisation).
The stock opened at Rs 446 and touched a record high of Rs 519 on the NSE. The trading volumes on the counter jumped more than three-fold with a combined 931,385 shares changed hands till 1143 hours on the NSE and BSE.
Vadilal Enterprises too trading at its lifetime high and is locked in upper circuit of 5% at Rs 385 on the BSE.
In the past three trading sessions, the stock of ice cream maker has zoomed 40% from Rs 350 on April 24, compared with 1% fall in the CNX Nifty.
Milk constitutes roughly 20% of the cost of raw material for ice creams, while sugar is around 2-3%, fat around 18% and the remaining are ingredients like cocoa, fruits, nuts, vanilla etc.
According to Business Standard reports, Ice cream makers, say that raw material prices on the whole would be down by about 7% this summer, boosting their margins. CLICK HERE TO READ FULL REPORT.
Meanwhile, according to an Antique Stock Broking report dated April 13, 2015, the promoters have been planning to merge Vadilal Industries and Vadilal Enterprises, the mandate for which has already been awarded, with an intention to exit from non-core business like frozen foods and gas. The company’s frozen foods business valued is at Rs 60 crore and it plans to pare debt with the sale proceeds.
Post merger and the sale of non-core assets, the balance sheet would look healthy and return ratios would improve (around 15% RoIC (return on invested capital) at peak capacity utilisation).
The stock opened at Rs 446 and touched a record high of Rs 519 on the NSE. The trading volumes on the counter jumped more than three-fold with a combined 931,385 shares changed hands till 1143 hours on the NSE and BSE.
Vadilal Enterprises too trading at its lifetime high and is locked in upper circuit of 5% at Rs 385 on the BSE.
