Bharat Agri Fert and Realty ( bse -531862)

CMP: 116


Bharat Fertiliser Industries (BFIL) was incorporated as a private limited company in 1959 and was converted into a public limited company in Feb.`63. It was promoted by C B Patel and D M Patel. The company was merged with Patel Packaging Industries Pvt Ltd which had a 1000 tpa HDPE woven sack unit next adjacent to its fertiliser unit, with effect from 1 Apr.`94 and the merged company was named as Bharat Fertiliser Industries. This was done to avail tax benefits and to reduce the packaging cost. The HDPE bags manufactured by the company, after captive consumption, is sold in the market, thereby increasing the turnover. Initially engaged in the marketing of fertilisers, the company set up a unit in 1963 at Majiwada, Thane, for granulated NPK fertilisers with an installed capacity of 33,000 tpa. In 1966, single super phosphate (SSP) production facility was added with a capacity of 22,500 tpa. In 1985, a composite chemical and fertiliser complex was set up in Wada, Thane, to manufacture sulphuric acid, SSP powder, SSP granulated and sodium silico fluoride (SSF). Due to overall slow down in economy and in particular due to the recession in Chemical and Plastic Industries the company suffered a operating loss during 2001. The company`s plastic division was closed since June,2002.
However due to Steep increase in Imported Crude Oil per barrel, defective Government Policy on pricing and Subsidy coupled with delay in payment of Subsidy, increase in prices of Raw Materials the Fertiliser Production dwindled and instead of making Profit and paying Dividend, the company started making losses from 1997 onwards till the entire net-worth was wiped out and the manufacture of SSP Fertiliser became difficult in 2004, the Company made a reference to BIFR reporting loss of net-worth to find out ways and means to revive and revamp the Company on 27/08/2008 detailed Form 'A' was filed with BIFR under Section 15(1) of SICA Act Thus, the Company which commenced production on 10/09/1985 came to a grinding halt for no fault on its part.

In all the foregoing darkness, only silver lining was the management of the Company. The Company is headed by dynamic result oriented Chairman and Mg. Director Shri Yogendra D. Patel who did not lose courage but with his innovative planning thought of developing Company's Surplus Land at Majiwada, Thane admeasuring 6,25,000 Sq. Ft. Freehold and unencumbered. After obtaining necessary approvals from Statutory Authorities the work of Construction Division commenced and is now in full swing.

Resumption of Company's Fertiliser Production

In a recent Development the Company has secured a prestigious Contract for conversion of SSP/GSSP Fertilisers from M/s. Rashtriya Chemicals & Fertilisers Ltd. for a period of 5 years from 01/05/2011 to 30/04/2016 with extension of 2 years on mutual consent. This gives an opportunity to re-enter into time long traditional business of the Company for 7 years to start with. The company has already re-vamped its Production Units to cater to this order. This order together with Construction Projects on hand assures continuous business for the Company.
n next 2/3 years the Company plans to take on hand Re-construction of Company's Head office and Registered Office in Fort area to be in the nearest of the City with assured income. The H.O. Building is in a dilapidated condition and its has been necessary to reconstruct the building after vacating tenant in the said building. After taking necessary approvals steps would be taken to start work of Reconstruction work into Ultra Modern Office Complex in small & medium size required for Professionals, Advocates and Solicitors Firm s for Office Area. This Complex would be nearly 11000 Sq. Ft. area and could earn Rs.30 Lacs per Month on completion of the Project. This will give permanent stability for the Company on financial front.
II) Setting up a International Standard Residential Cum Educational Complex at Company's Surplus land of 150 Acres under Foreign Collaboration. The Company intends to utilise its 150 acres of surplus land at Wada for construction of International Standard Residential cum Educational Complex under Foreign Collaboration in next 2/3 years subject to compliance of all necessary Permissions, approvals from State and Central Governments Necessary steps are being taken in this regard.

Bharat Agri Fert & Realty Ltd. said that its board of directors has approved 75,000-80,000 MT of production and sales of SSP fertilizer for the upcoming financial year. To achieve the target, the company will approach existing bankers to increase working capital limit based on its performance and achievements for current year, the company said in a filing to the Bombay Stock Exchange. Moreover, Bharat Agri hopes to receive modifications in TMC plan, based on MOEF permission and will commence construction of F Tower on present available limit of 26,527 square meters as approved by MOEF, New Delhi. In addition, the company is expected to reach the targeted turnover of Rs 60 crore +-5 per cent with reasonable profit of Rs 25 crore +-5 per cent for the financial year 2012-13, the filing added.
FINANCIALS:


Sales improved from 1.30cr to 30.21 cr and net loss of 5.20cr to NET PROFIT of 9.38cr during the period from 2008 to 2012. EPS of 17.75 for 2012 against which the company registered an impressive sales figure of 34.86 and a EPS of 31.78 for the first 9 months of the current FY 2013.
Company is expected to give good quarter

- Company is virtually debt free.

- Company has a good return on equity (ROE) track record: 3 Years ROE 76.84%---ROCE in 2012...36%

- Company has good consistent profit growth of 104.90% over 5 years. N et profit Margin in 2012 is 30%
-Paid a dividend of 15% in 2012

Te stock appears to gain significant upside in the medium/ long term