Usher Agro Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,views and outlook,multibagger

Scripscan:Usher Agro Ltd
Code:532765
Cmp:135

Story:Usher Agro Ltd., an agri-food processing company, engages in the engaged in milling and processing rice and wheat products in northern India. The company offers raw rice, parboiled/steamed rice, and brown rice, as well as husk. It also provides wheat products, such as R-Atta, rawa, suji, chakki Atta, wheat flour, and bran. The company offers its products under the Rasoi Raaja brand name.Usher Agro exports its products to the Middle East countries, such as Dubai, the United Arab Emirates, Saudi Arabia, and Oman, as well as Iran, Kuwait, and United Kingdom. The revenue contribution from exports last year was ~Rs 200mn and this year its poised for Rs. 600mn.Usher Agro’s strength is its presence in both the segments, namely Rice and Wheat.No other company in the organised sector has a presence in both, Wheat and Rice.Wheat is a Rabi Crop and Rice is a Kharif crop.It grows Rice on the same field after harvesting Wheat and vice versa. Moreover, it has an edge over other players as its strategically located at Mathura in U.P. and Buxar in Bihar.Usher’s operating margin is set expand to 14.6% in FY12E with commencement of its bio-mass based power plant. Usher Eco Power,a subsidiary of Usher, is planning to set up the 16 MW husk-based power plant in Chhata (UP).This is likely to help Usher attain higher integration, enabling it to process the husk by-product obtained in rice milling, aiding margin expansion.The management guides for commencement of the power plant by this July 2011 itself. Of the 16 MW capacity, Usher expects to use ~5 MW for captive consumption and sell the remaining as merchant power.It is further adding 50,000 tonnes Wheat milling capacity.Usher is also putting a Silos complex, for storing the raw material.The company has recently commissioned 3 lakh tonnes in March.With the new capacity expansion, next year (FY12) its targeting a turnover of Rs. 10bn(accounting period is July to June).The company is confident of posting more than 50% growth in the topline after that.Given strong revenue and profit growth prospects over the next three years,backed by scale-up of capacities,Usher looks in good shape at current levels with attractive valuations.The company has rallied up a lot in the last few months and thus warrants a buy at sub 110 levels.