CMP: 313

Riddhi Siddhi Gluco Biols Ltd manufactures starch and glucose. The Company manufactures various types of starch, liquid glucose, dextrose monohydrate, maltodextrin, dextrose syrup, high maltose corn syrup, and byproducts like corn gluten meal and enriched fiber. Riddhi Siddhi also exports its goods to other countries.

RSGB is a value buy at P/E of just a little over 2. The stock has fundamentally come a long way in the last 3 years, surging from profits of 13 Crores in FY09 to 165 Crores in FY11 (Aided by NPM rise from less than 3% to 16%). Revenues have always been stable and growing in the last 5 years. There are many doubters in the markets asking why it trades at such low P/E for such attractive valuations and growth. Profits in FY 2007, 2008 and 2009 have been below ordinary and alarming considering their liabilities at that time. The last 2 years surge and recovery has pushed the stocks from 60 levels to 300 and P/E re-rating always takes it own time. Buy and make use of it.