This small-cap stock doubled investor wealth in one year

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Shares of Vadilal Industries have doubled investors’ wealth in the last one year, surging from 1,026 to 2,112.20 levels. The stock has seen a one-way rally so far in 2022. During the last six months, it has risen from 880 on January 25, 2021, to its current level of 2,111.30, representing a multi-bagger return of 140.88 per cent at a time when the Sensex has fallen by nearly 4.12%.

Further, in the last 3-year period, the stock has surged from 493 to 2,112.20 a piece, logging nearly 328.39 per cent. The stock hit a 52-week high of 2,247 on July 18, 2022, and a low of 823.8 on January 25, 2022, implying that it is currently trading 156.64 per cent higher than its 52-week low.

Vadilal Industries is a century-old company founded in 1907. It is a small-cap FMCG stock engaged in the packaged food industry with a market capitalisation of over 1,518.5 crore.

The company is engaged in the business of manufacturing ice cream, flavoured milk, frozen desserts, processed foods, and other dairy products. It is also engaged in the export of ice cream, dairy products, processed food products such as frozen fruits, vegetables, pulp, ready-to-eat and ready-to-serve products etc.

Vadilal has a presence in over 45 countries, including the countries in North and South America, Europe, the UK, the Middle East, South East Asia, and Australia.

For the January-March quarter (Q4FY22), the company reported a 31% year-on-year (YoY) increase in consolidated profit after tax (PAT) of 21.69 crore compared to 16.54 crore in Q4FY21.

For the full fiscal year 2021-22, Vadilal’s profit jumped nearly 10-fold to 44.70 crores as against 4.63 crore in FY21. Revenue from operations increased by 51% year on year to 463 crore.

Vadilal Industries had said that the business of the holding company was impacted during the financial year on account of the second wave of COVID-19 and the holding company witnessed lower revenues in the domestic ice-cream business in April and May 2021, being the peak period of the ice-cream business, reported Business Standard.

The management said the ever-growing urbanization, rise in disposable income, and an increase in “out-of-home food” consumption, coupled with the steep increase in the availability of multi-cuisine restaurants and online portals in the residential areas, are some of the reasons behind the thriving ice cream industry.

Compared to western countries, per capita ice cream consumption in India is low. Given that there is a huge scope for ice cream market expansion and penetration in India with an innovative product mix to attract all classes and masses of consumers, it added.

The promoters hold 64.73 per cent of the shares in the company, Mutual funds hold 0.01 per cent of the shares, and regular shareholders own 35.21 per cent.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

This story was first published on MintGenie and can be accessed here

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