Vadilal Industries an investment stock

Vadilal Industries is principally into ice creams and food processing. In ice creams, it has a weak pan-India presence; its product quality is variable and it is easily flattened by Amul which has access to the cheapest raw material among all ice cream players, as well as the money and skills for countrywide marketing. Vadilal has remained a small player in ice creams. Its processed food division makes and markets a range of fruits, vegetables and ready-to-serve Indian foods. The quality of the processed foods, parathas and palak paneer and dal makhani produced by the company is not up to the mark. It exports products to European Union, the Middle East, the Asia Pacific region and the US markets. It is now aim to supply its products to the Indian retail chains, including Reliance and Big Bazaar. So Why Vadilal is considered for investing? The company has 18% share in the Indian ice-cream marketplace and ice-cream market is growing at a rate of about 15%.

Why Vadilal is considered as a long term investment stock?

This stock’s category has a good potential, and the brand is well known, but the stock has not done anything in the past two to three years, mainly because the company has not shown a Outstanding growth. Ice-cream industry is not in good condition mainly because of power down conditions in not just larger cities, but in towns and villages which is not allowing retailers from stocking ice-cream.  So once the power situation improves, growth can be seen in the ice-cream market.

More important, Indian Warren Buffet, Rakesh Jhunjhunwala who holds 2.78% stake in the company.

6 Month Chart from MoneyControl.com

Read More:

1. http://articles.economictimes.indiatimes.com/2014-02-06/news/47089793_1_ashish-chugh-selan-exploration-barrels/2