Sheetal Cool Products Ltd - SWOT Analysis - BSE SME Company

Sheetal cool products -

Incorporated in 2000, Sheetal Cool Products Ltd is Gujarat based company involved in producing and processing of milk and milk products, snacks and bakery items. The product involve Ice-cream, milk & milk products, mango ras, lassi, curd, flavoured milk, masko, wafers, namkeen, fryums and bakery products. Company sells its product under the brand name 'Sheetal'.

The company is into the following line of products -
1. Milk products - 145cr
2. Snacks - 9.3cr

Milk products -

1. Ice Cream - 14.5 lakh litres capacity - utilization 86%
2. Mango ras - 45000 litres capacity - utilization 66% (erratic)
3. Lassi - 50 lakh litres - utilization 100%
4. Buttermilk - 18 lakh litres capacity - utilization 97%
5. Milk - 135 lakh litres capacity - utilization 95%
6. Masko - 60 lakh kgs - utilization- 90%
7. Namkeen - 2 lakh kgs - utilization- 110%
8. Fryms - 8 lakh kgs - utilization- 90%

Some details on current capacity details. Using the ipo proceeds, the company plans to ramp up the capacity of some of the products. The incremental capacity gives rough revenue visibility of about 25% higher in Namkeen segment & about 35% higher in milk products segment. And a good capacity addition coming in next few years as well. Talks about some 220cr revenue potential in next 12 months. Presence mainly in Gujarat, and some parts of Maharashtra & Rajasthan.

Strengths -

- FMCG company available at 7x ev/ebitda - Relatively cheap
- Current full capacity utilisation talks about demand.
- Capability to build business in Gujarat despite having a strong brand like Amul.
- Rural markets focussed brand.

Weaknesses -

- Just present in a single state - Gujarat. ( the company has taken steps to expand - currently set foot print in Maharashtra & Rajasthan)

- Perishable product

Opportunity -

- Market size can be huge considering the size of the company

Threats -

- Potential competition from bigger brands (rural focus should negate this)
- Being in a single state any natural calamity can impact them in a big way.

Disclaimer: SME investments are subject to illiquidity risk & information asymmetry risk. This is not a buy / sell advise. Please do your own due diligence before buying / selling this stock.

Source : Equity Bulls

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