Ajanta Soya Limited - Repeat

 

CMP = 32

Ajanta Soya Ltd (ASL) is incorporated in 1992 and primarily engaged in the business of manufacturing and refining of edible oils, vanaspati and bakery products such as biscuits, puffs, pastries and other applications. The company markets its products through brands such as Dhruv, Anchal, Parv, Nuti 1992, ASL Pure & Fine Fingers with a legacy spanning over three decades. 

Specialising in the manufacturing of Vanaspati and a diverse range of cooking oils, including shortening products tailored for Specialty Fats such as biscuits, puffs, and pastries, ASL has emerged as an industry leader.  ASL has proudly introduced over 300 SKUs to the market, delivering an impressive 22.3 Lac tonnes of Edible Oil.

The manufacturing facility is located at Bhiwadi (Rajasthan) with a total installed capacity of 1,65,000 mtph. Since inception, the company is focused on continuous expansion, across all business verticals to consolidate its industry leadership. The company has been listed on the Bombay Stock Exchange Ltd since 1993.

The company has a strong portfolio of brands viz. Dhruv, Anchal, Parv, Nutri ,  Pure & Fine Fingers. The brands have a reputable market share particularly in northern Indian market i.e. Rajasthan, Delhi, Haryana, UP, MP Bihar, Gujarat, Bengal, Assam etc

Vanaspati & refined cooking oils accounted for ~98% of revenue and other by-products and bakery applications accounted for the rest ~2% revenue. ASL makes a special type of edible fat made by a process called hydrogenation. Specialty fats & bakery shortenings used in baked goods to keep them soft after baking.

Contract Manufacturing

The company also manufactures refined oils for third party / contract manufacturing for various renowned brands. In total, it caters to over 100 different packing sizes for more than 10 brands. However, around 50% of revenue is generated from sales under own brands. 

The company has long association with reputed clients such as Britannia Industries, Parsons, Surya Food & Agro Ltd, Godrej, Bikano, Anmol, United Biscuits, Sungold, Harvest Gold, Parle, PriyaGold, PepsiCo, ITC, Haldirams, Cremica etc.

Manufacturing 

Since inception ASL has never let go of an opportunity to expand and modernise to keep up with the changing technologies & market trends. ASL has the state-of-the-art manufacturing plant with latest technology. The plant has the facility to manufacture Vanaspati, cooking oil & bakery shortening for puffs, biscuits, pastries and table margarines. The plant is strategically located 100 kms from Delhi in industrial town of Bhiwadi - Rajasthan. 

ASL takes pride in its boastful market share in northern India. The brands of ASL are backed by an extensive distribution network as the company operates though its strategically located dense populated area in north India. ASL has penetrated deeply in the market with its emphasis on providing value goods to consumers through its CnF agents and dealers  who are operative in major cities and rural areas of India.

Quality

ASL is an ISO 22000:2018 certified company. The unit follows quality standard and testing based on BIS.  Superior procurement and trading skills, continuous innovation, an endeavour to meet consumer needs and stringent quality control standards have enabled ASL to emerge as a highly-respected and admired edible oil company. ASL witnessed significant progress in terms of market penetration and brand recognition in the past years. 

Its commitment to quality and continuous improvement has helped it to gain customer trust and loyalty. Looking ahead, company aim to expand its distribution network, explore new product categories, and invest in technology to enhance productivity and sustainability.

Investment Rationale 

At present, India is the world’s largest importer and consumer of edible oil. Over the past six decades, the per capita consumption of edible oils in India has substantially increased. It now stands at approximately 20 kg per year. Factors such as rising disposable incomes, urbanisation, evolving dietary preferences and the expansion of the food processing sector have led to a heightened demand for edible oils in India. To meet this burgeoning domestic demand, India imports approximately 16 million metric tonnes of edible oils every year and around 50 - 60% of domestic consumption demand is met through imports.

The outlook for the edible oil manufacturing industry in India appears promising. Factors such as population growth, rising disposable incomes, and changing dietary patterns all contribute to the increasing demand for edible oils. Moreover, the government's emphasis on self-sufficiency in edible oil production through initiatives like the "Make in India" campaign further supports the growth prospects of the sector.

Since last one year edible oil prices are stable. Edible oil consumption will also pick-up in coming festive season and winter, it will bring the growth back on track.  Edible oil consumption is expected to grow at 6-7 % and is likely to continue this trend in future as well.

In consumer packs, ASL leads the Rajasthan market with an established credibility in other states. The most popular brand of Vanaspati / cooking oil are 'Dhruv' and 'Anchal' & they enjoy a reputed market share particularly in northern India market i.e. Rajasthan, Delhi, Haryana, U.P, Bihar and some parts of eastern India like Guwahati. ASL also offers its quality products as food ingredients to serve food manufacturers and food service industry. The bakery products are preferred by all range of customers and are popular till the region of J&K

By way of periodical expansion, ASL has increased its production capacity from time & again to cater to changing business environment & varied customer needs. The company’s turnover has increased manifold over the decades and is expected to maintain its growth in coming  years. ASL also focuses on in-house research and innovation to be a low cost manufacturer with high-quality products and innovative customer offerings.

The company is now focusing on increasing the capacity utilisation by market expansion for its different products and their variants for growing market demands.

ASL is catering to third party/contract manufacturing for various renowned brands exemplifying the units capability to produce all kind of varieties.  ASL is catering with over 100 different packing sizes for more than 10 brands.

The company is promoted by well established group having and proven track record in the fields of cooking oils. The three-decade long experience of the promoters in the edible oil industry, their understanding of local market dynamics and healthy relationships with suppliers and customers is very positive for ASL future business growth.

ASL also extends its expertise as a trusted food ingredient supplier to food manufacturers and the food service industry. Its corporate customers boast names of the biggest manufacturers in food industry with the most stringent norms for products, including biscuits, cookies, Indian snacks/ namkeen, bakery items & other customers with different applications of  products.

ASL is driven by a vision of continuous expansion and innovation, it has consistently enhanced its production capacity to adapt to evolving market dynamics and meet the diverse needs of its clientele. Bolstered by a seasoned group of promoters with a proven track record in the cooking oil domain, ASL has successfully served over 2108 customers across 8 states, with an impressive 83.5% rate of repeat orders.

With an unwavering commitment to quality and customer satisfaction, ASL has carved a niche for itself as a low-cost manufacturer offering premium-quality products and innovative solutions. Boasting a robust production capacity of 600 MTPD and an annual turnover exceeding 162.62 million USD, ASL takes pride in its strong portfolio of brands and its esteemed market reputation.

Conclusion

Ajanta Soya is a leading manufacturer with well established market position in edible oil industry. Promoters has extensive experience of  three decades in the edible oil industry it has enabled the promoters to gain a strong understanding of local market dynamics and build healthy relationships with suppliers and customers.  The company has focused on continuous expansion, across business verticals to consolidate, and its industry leadership over the years. 

Indian edible oil industry has numerous potential as deficit between production and consumption of edible oils is increasing rapidly. India will continue to import edible oils to bridge the gap between demand / supply. There is good opportunity for the Ajanta Soya to address the growing the demand and supply gap imbalance. ASL revenue has grown by 30% year-on-year to Rs 1,300 crore in fiscal 2025. Going forward, addition of dealers and value-added products, and bidding for more government orders should drive volumetric growth. 

Ajanta Soya stock was earlier posted on September 18, 2023 and given 100% return in Jan 2025. The stock corrected more than 50% since Jan 2025. Ajanta Soya has well established business, no debt and strong balance sheet.  Ajanta Soya stock at  cmp Rs 32 is giving excellent investment opportunity for both short term and long term. It can be bought within 10% from cmp with 10 %  allocation. 

Note :

If someone already hold Ajanta Soya than need to keep the same with maximum allocation 10% only.

Today stock gone up 9.5% so need to buy within 10% from cmp.