Aries Agro Ltd (CMP - Rs 173.85)

The company manufacturing plant nutritional products, is planning to set up four new manufacturing facilities at Panvel (Maharashtra), Ahmedabad, Hyderabad and Lucknow at an investment of Rs 400 mn. The new facilities would enhance the company’s production capacity by fivefold to 100,000 tonnes per annum, from the current 21,000 tonnes. Besides, it also plans to increase its retailer network to 100,000 from 65,000 spread across 20 states. Currently the company has four manufacturing facilities at Mumbai, Hyderabad, Kolkata and Bangalore. Its new Hyderabad facility will commence operations by March 08, while the remaining will be operational by September 08. The stock is trading at 10x its FY08 estimated EPS of Rs 17.3. We recommend ‘Accumulate’ on the stock.

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