Dildar S Makani of Money Times has the following View on Prabhat Dairy LTD a Potential Multibagger in his view.
For FY16, Prabhat posted total income of Rs.1000 crore and notched an EPS of Rs.1.09 despite the fact that the depreciation has risen from Rs.5.74 crore in FY12 to about Rs.15.13 crore in FY16 indicating the heavy capex. Its net profit has also trebled over the last few years from Rs.3.07 crore in FY12 to Rs.9.39 crore in FY16.
With the fresh issue of shares to promoters through bonus and IPO, the current equity of the Company stands at Rs.97.68 crore backed by reserves of Rs.425.93 crore. Its share book value works out to Rs.53.56.
There is limited competition in this industry. Prabhat's products are reasonably priced and are lower than that of other established brands. The Company is likely to post superb Q1FY17 results, which are scheduled on 13 September 2016. Investments at the current level will give fantastic returns. However, we recommend to hold this stock for a period of two years to reap maximum gains. The Company is at the point of inflection and is taking off for a bright future. Sooner or later, the markets will realise the price-value anomaly, which will boost its share price to its real value. Grand opportunities do not knock repeatedly.
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