Vidhi Specialty, a Micro-Cap, is 6x Multibagger in 5 years. Does it have more multibagger potential?

Discussion in 'Must-Read Interviews, Articles & News Items' started by Arjun, May 28, 2022.

  1. Arjun

    Arjun Chief Executive Officer (CEO) Staff Member

    Mar 19, 2015
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    Vidhi Specialty Food Ingredients, a micro-cap stock, with a market capitalisation of Rs 1900 crore, has not only defied the Bearish market but is up 92% YoY. Over the past five years it is up 600%. It has a RoCE of 33% & P/E of 32.


    The stock was first discovered by the famous anonymous blogger named ‘aceinvestortrader’ as far back as in 2014.

    This small cap company with pricing power which has grown its topline at 30% CAGR and bottomline at more than 66% CAGR over the last five years with a remarkable dividend payout is available single digit PE. Notably the dividend is increasing every year and this year they have already paid an interim dividend of 25% (last year total was 40%). The company has healthy return ratios and is expected to maintain the growth rate. The debt is also decreasing since last few years is now just above 2cr. Given its huge stature in Food Colors industry and dominant position with all range of offerings, the company is distinctly undervalued,” he had prophetically observed.

    The stock gained credibility in Dalal Street when Nigel D’Souza of CNBC flashed the spotlight on it in 2017. All the salient points about the Company have been explained in a cogent manner.

    There are not many research reports available on the Company.

    There are dated (2021 & 2020) research reports of Sunidhi & Motilal Oswal respectively on the stock.

    According to the latest investors’ presentation, the financial performance in Q4 & FY22 is quite impressive.


    It is also stated that the food colour industry has limited players and huge potential.


    Huge Growth Opportunities: Every year incremental demand of ~Rs. 1,500 to Rs, 1,700 crores is expected to generate globally for Food colours,” it is stated.

    It is also stated that there is a long runway for growth and “demand supply gap” which is being addressed by the Company through capacity expansion.


    Notable shareholders

    In August 2014, Nikhil Vora Of Sixth Sense Ventures had bought 497,114 shares at Rs. 47.40 each, making an investment of Rs. 2.35 crore. It is not known whether he still holds the shares.

    As per the shareholding pattern of 31st March 2022, Mukul Agrawal holds 9,20,765 shares constituting 1.84% of the equity. Chetan Rasiklal Shah, his wife Geeta Shah and Miten Mehta also hold sizeable number of shares.

    The Promoters hold 64.27% while the Public holds 35.73%. There are no mutual funds holding the stock as yet.
    Last edited: May 28, 2022