INVESTMENT IDEA FOR-6--12 MONTHS--USHER AGRO

Usher Agro Ltd. 

Industry: (Food Processing)

(NSE: USHERAGRO | BSE: 532765)

(Closing price on 14-08-2018: Rs. 43.60)

Price Background: The all-time high for the script which is Rs.162.40 was made on 26-7-2011 and all-time low of Rs.24.15 was made on 30.9.2013. The high and low for year 2013 was Rs.69.55 & Rs.24.15 and for 2014 Rs.62.90 & Rs.28.00 respectively. The high and low for year 2015 (as on date) is Rs.29.70 & Rs.55.85.

Company Profile:- Usher Agro Limited was founded by Dr. Vinod Kumar Chaturvedi and Mr. Manoj Pathak on June 20, 1996. The company’s name was inspired by its meaning. “Usher” (verb) means: “cause or mark the start of something new”. It entered the Food Processing Sector by setting up its first Rice Milling Plant at Mathura, Uttar Pradesh in 1996 of 10,800 MTPA and today has grown to become one of the largest agro-food processing companies in India with integrated milling capacities of Rice, Wheat and Pulses. With this the company also manufactures other value added products like silica, fortified rice. The company also prides itself to have one of the largest single location Rice milling capacity in India. Usher sells its products under the widely accepted brand name “Rasoi Raaja”. The company also has a subsidiary called Usher Eco Power Ltd, It is into Rice Husk based eco-friendly power generation activity located at Chhata Dist: Mathura, U.P. generating 16 MW power. The Company has also forayed into the manufacturing of Silica from the ash generated by the burning of husk.

Usher has one of the largest single location rice milling plant in India of 9,72,000 MT PA y Total Rice milling capacity of 10,81,440 MT PA y Wheat milling capacity of 1,25,400 MT PA y Pulses and Pulses flour of 1,28,700 MT PA y 12 Modernized silos at Chhata plant each with a capacity of 3,000 MT to store raw material.(source of company profile www.bseindia.com)

Fundamental: The Company has been giving good financial performance year after year but it is not truly reflected in the share prices but the price performance cannot be ignored by the market for long and it may start to happen in coming days. For the year ended 30-6-2015 it has posted a net profit of 62.09 crores giving an E.P.S of Rs.16.31. At the current rate, the stock is at a very low P/E of 2.67. Therefore, I feel that the stock has good potential to move up.

Technical’s: Technically the stock is in consolidation mode and it may take some time to gather up momentum .Once it crosses Rs.48 mark and sustain then steady up move may begin. The key support and resistance level for the script are given here under.

SUPPORT LEVELS:-39.70 / 35.70 / 33.60 / 32.50 / 29.70. 

RESISTANCE LEVEL:-50.90 / 52.65 / 55 / 55.85 / 62.90 / 70.95 / 103 / 104.75.

Recommendation: I expect a return of 50-100 % in 6-12 months. I therefore recommend investing at least 30% of the marked fund for the script at the current level and then suggest buying on dips. Kindly be alert if the stock price goes below 35 and stays at that level. Please get out of the stock if price closes below 32.50.

P.S. Kindly note that make your cost your stop loss in favorable trade and then trail it as the price of the stock moves up to gain maximum profit.

Disclaimer:-The view expressed here are solely of the author and he is not at all responsible in any way for the outcome of the trade you enter based on the above view.