Stock watch: Freshtrop fruits

Freshtrop Fruits (FFL) could be an attractive scrip going forward. The stock, which closed at Rs 49.15, was up 7.15 per cent compared WITH its previous close of Rs 46.15 touching an intra-day high of Rs 50.70 with 114,390 shares traded on Thursday.

"Higher profitability, growing cash flows, lower debt equity, expansion plans to foster volumes and being the only listed company in this sunrise sector makes FFL attractive", says Himanshu Varia of Asit C.Mehta Investment Intermediates.

FFL exports fresh fruits and vegetables to leading Supermarket chains in Europe. Its clients include ASDA-Walmart, Tesco in UK, Albert Heijnes and Schuetema in Holland, Delaize in Belgium and Migros in Switzerland.

Presently India exports only 1 per cent of its horticultural produce and is likely to emerge as a major producer in the near future. For six consecutive years FFL has achieved a sales growth of over 25 per cent with sales reaching Rs 23.27 crore.

For FY06, analysts are projecting a turnover of Rs 33.7 crore and earnings before interest depreciation and tax of 6.2 crore and profit after tax of Rs 4.9 crore.

Freshtrop has established strict multi-point quality and residue controls adhering to the UK and CODEX standards. It also enjoys various subsidies provided by the government to encourage exports of agro-produce.

The company would be saving cost to the tune of Rs 20-25 lakhs due to these subsidies. FFL plans to invest Rs 20-25 mn for expanding its operations in Southern Maharashtra. It is also planning to set up infrastructure for distribution of fresh produce in the domestic market.