DILIGENT INDUSTRIES INDIA

1. DILI:IN 15.0INR:BSE ANALYSIS
JESSE LUDENYO ACIFA
0718187437;

2. DILIGENT INDUSTRIES: MID CAP STOCK, BSE INDIA
₹ Diligent Industries Ltd., incorporated in the year 1995, is a Small Cap company (having a market cap of Rs
34.31 Crore) operating in Agro Processing sector.
₹ Diligent Industries Ltd. key Products/Revenue Segments include Edible Oil for the year ending 31-Mar-
2020.
₹ For the quarter ended 31-03-2021, the company has reported a Standalone Total Income of Rs 11.60
Crore, down 52.45 % from last quarter Total Income of Rs 24.39 Crore and down 32.36 % from last year
same quarter Total Income of Rs 17.15 Crore. Company has reported net profit after tax of Rs -.24 Crore in
latest quarter.
₹ The company’s top management includes Mr.Bhanu Prakash Vankineni, Mr.Kirankumar Vankineni,
Mrs.Phani Anupama Vankineni, Mr.Srinivas Babu Edupuganti, Mr.Lokeswararao Nelluri, Mr.Mohammed
Baba. Company has NSVR & Associates LLP as its auditors. As on 30-06-2021, the company has a total of
2.29 Crore shares outstanding.
₹ Board members include: Bhanu Prakash Vankieneni, Kirankumar Vankineni, Phani Anupama Vankineni and
Srinivas Babu Edupuganti.
₹ Its address is Dwarka Thirumala Road,Denduluru Village and MandalWest Godavari, Andhra Pradesh -
534432

3. KPI AREAS FOR FUNDAMENTAL ANALYSIS

4. KEY RATIOS JUN 2021
Key statement of comprehensive income and statement
of financial position ratios are encouraging especially
profitability and debt ratios. They show potential for the
company. Stocks P/E is at 79.8, very high given that it is
a midcap stock as shareholders bound to enjoy Return
on Equity of 3.95% and an almost double Return on
Capital employed. High stock P/E resonates with high
return on Equity of 3.55% for a midcap stock. This is also
commensurate with sales growth of 18.3%. Given that it
is in the foods and agriculture sector, its products will
averagely be on demand and increasing sales growth is
expected going forward other factors held constant.
Globally food sectors are expected to grow since food
demand is always present. Positive interest coverage
ratio of 1.32 also observed.

5. STATEMENT OF COMPREHENSIVE INCOME AS AT JUNE 2021

6. STATEMENT 2021
DILIGENT INDUSTRIES LTD
Narration Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Trailing Best Case
Sales 0.03 47.68 40.90 84.29 45.81 60.75 78.44 77.85 81.34 71.20 81.22 81.22
Expenses 0.20 45.53 39.04 81.13 43.71 58.77 75.33 77.25 79.82 68.96 79.60 79.60
Operating Profit -0.17 2.15 1.86 3.16 2.10 1.98 3.11 0.60 1.52 2.24 1.62 1.62
Other Income - 0.29 0.01 0.01 0.08 0.12 0.02 1.87 1.21 0.78 1.32 -
Depreciation - 0.47 0.52 0.45 0.45 0.45 0.49 0.49 0.60 0.62 0.65 0.65
Interest - 1.59 1.87 2.35 1.68 1.58 1.65 1.49 1.50 1.74 1.74 1.74
Profit before tax -0.17 0.38 -0.52 0.37 0.05 0.07 0.99 0.49 0.63 0.66 0.55 -0.77
Tax - 0.20 -0.32 0.50 -0.02 0.09 0.34 0.08 0.14 0.18 0.13 24%
Net profit -0.17 0.19 -0.20 -0.13 0.07 -0.02 0.64 0.41 0.48 0.48 0.43 -0.59
EPS -0.21 0.24 -0.09 -0.06 0.03 -0.01 0.28 0.18 0.21 0.21 0.19 -0.26
Price to earning -15.48 26.74 -136.03 -805.55 474.36 -2,295.73 56.89 42.28 17.37 39.12 81.37 81.37
Price 3.29 6.35 11.88 45.73 14.50 20.05 15.90 7.57 3.64 8.20 15.30 -20.92
RATIOS:
Dividend Payout 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
OPM 0.00% 4.51% 4.55% 3.75% 4.58% 3.26% 3.96% 0.77% 1.87% 3.15% 1.99%
TRENDS: 10 YEARS 7 YEARS 5 YEARS 3 YEARS RECENT BEST
Sales Growth 137.16% 8.24% 9.22% -3.18% 14.07% 14.07%
OPM 3.18% 2.94% 2.56% 1.89% 1.99% 1.99%
Price to Earning 105.45 118.56 47.41 45.03 81.37 81.37

7. SCI DEBRIEF 2021
 DILI shows promising sales growth over capital spending over the last quarter. The instability in the numbers
through the first to the last quarter of 2020 can be attributed to the covid pandemic especially the Indian
strain effect. However posting double sales returns over one quarter difference period shows a lot of
potential going into 2022. This, I anticipate will boost next end of year financial statements.
 In the last quarter, it recorded the highest sales growth of 14.07% and the best Operating Profit Margins
growth of 1.99%.
 Operating profit has also migrated from negative numbers to positive which shows efficiency in operations.
Margins have also changed from -3.86% to +0.66% consequently.
 Income form other sources still minimal but within positive ranges which means ability to diversify and given
that it is in the foods and agriculture sector, this is highly commendable.
 Profit before tax for the first time since 2020 has moved to positive values from the negative ranges which in
turn has effected the move from negative EPS to positive EPS
 It has also shown the highest Price to Earning Ration in the last 5years at an average of 79.8.

8. INDUSTRY ANALYSIS AND PEER COMPARISON 2021

9. INDUSTRY ANALYSIS AND PEER COMPARISON 2021
 Despite the stock price being at only 15 CMP Rs. It has among the leading PE ratios among its peers in the
industry
 Additionally, its market cap is relatively smaller than all the other players.
 Earnings yield of 3.7% in percentage terms is still higher than its other peers with higher market
capitalization and sales amounts in the last quarter such as Agro-Tech foods and Manorama Industries.
 A purchase of this stock at a price of 15 will prove advantageous since its cheap in the market and with
projections indicating expected stellar performance, I believe that growth in stock value is inevitable and
presents potential for profit.
 With promising performance, it is also expected that dividends will be issued going into the next financial
year. Management has been issuing dividends in the prior years but there was a halt during the covid
pandemic years.
 It also has been quick to report positive free cashflows unlike some of the players in the industry who are still
picking up.

10. ACTIVITY RATIOS 2021

11. ACTIVITY RATIOS 2021
 DILI shows steady growth in Return on Capital Employed over the last 3 quarters
 Cash conversion cycle of 127 is quite high but however being in an industry that is capital intensive, they
would majorly require the cash for conservation purposes/to conserve cash. Management had announced
major investments into manufacturing equipment to help in the fast-tracking of the manufacturing process.
 Inventory days at 37 days, roughly 1 month have reduced drastically from 80days in 2015 which again
confirms on efficiency of systems and processes
 Similarly, working capital days have averaged at 40 days over the last couple of years
 This is why my recommendation is a buy.

12. TECHNICAL PRICE LOOKUP 2021

13. THANK YOU
REUBENLUDENYO@GMAIL.COM
FXJFOREX@GMAIL.COM
0718187437
RECOMMENDATION: BUY