Below the BFL’s earnings pattern:
31.03.2009 - 10.2 Mn (EPS 0.64)
30.06.2009 - 12.5 Mn (EPS 0.78)
30.09.2009 - 24.9 Mn (EPS 1.56)
31.12.2009 - 21.8 Mn (EPS 1.36)
31.03.2010 - 71.1 Mn (EPS 4.43)
30.06.2010 - 104.1 Mn ( EPS 6.51)
30.09.2010 - 114.4 Mn (EPS 7.15)
31.12.2010- 163.9 m (EPS 10.24)
When we look at above performance it is clear that BFL will be able to report EPS 40 in FY 2011.
With their new venture in Puttalam this will be an easy target. The other thing is their ready made poultry products( Pre-cooked items) are gradually settling down in the market. The tourist arrival is higher than we expected. The government reduced the tax on import of maize to reduce the cost of poultry feed. ( Even with tax BFL is well off as they produce maize locally)
They have got a ten year tax holiday for their new state of the art poultry farm in Puttalam.
They invested Rs 120 million initially.Additional investment in the second and third year being Rs 240 million. They expect to crease their commercial broiler production by 20 % in the first year, 20 % in the second year and 15 % in the third year. The first batch of chickens from this farm will be ready by April/May 2011.
With this product they will surely grab a bigger market share and maintaining above 10 quarterly EPS through out 2011 is an easy target. So we can expect
With EPS 40 BFL share is worth, If sector PE = 16
Expected BFL Share Price = 40 x 16 = Rs.640/-
50% gain is most possible.
But, if you go with TAFL,
Last quarter they earned more than 5 of EPS. More possible 31.03.2011 end quarter TAFL to report more than 7.0 of EPS. This means TAFL also we can think, they go for a more than 20 of EPS for 2011. With PER of 16 , we can see TAFL also worth = EPS 20 X PER 16 = Rs.320/- level. This benefit will go to GRAN.
So,Poultry group 31.03.2011 quarter results will release after 20 th april. Before that they will have a mega rally.
My next poultry barriers are below.
BFL – Rs.625/-
TAFL – Rs.270/-
GRAN – Rs.275/-