Current Price (BSE)	Rs 32.90
Market capitalization (28 July, 2014)	Rs 127 Cr
Face Value	Rs 10
EPS (March 31, 2014)	Rs 3.52
P/E	9.3 times
Book value Per share (March 31, 2014)	22.45
Price to Book value	1.46 times
No of Shares	38,603,250
BSE 52 week High	Rs 33.35 (25 July, 2014)
BSE 52 week Low	Rs 7.95 (26 July, 2013)

About the company:

Promoters	Vikram Thapar group of the Thapar Family
Business	Aquaculture: Shrimp feed, farming &processing
Commencement of operations	1993
Unit location	Nellore (Andhra Pradesh)
Corporate office	Chennai

“The Waterbase Limited” commenced its feed mill in 1993 and has an annual capacity of 30,000 T.P.A. It is a ISO-9001 certified shrimp mill. The Company claims to have a feed distribution network of more than 100 distributors and dealers across coastal belt of India. The distribution network provides round the clock services and also assists farmers with latest developments and farming techniques, thus directly and indirectly engaged in spreading the product reach. As per company website, the feed mill is certified for Organic Feed Production by Naturland, Germany. The process plant has a capacity of 20 MT per day and the cold storage unit has a capacity of 400 MT.

Company has developed its ponds in Nellore for shrimp farming. Apart from farming, all the research & development related works to studying the shrimp growth in various conditions, are conducted at Nellore farms.

The company follows HACCP guidelines and is among the few Indian companies that have FDA approval for exports to USA. It exports shrimp in different forms to the quality–conscious markets of Japan, USA, and Europe. In addition, the company supplies value–added shrimp in different forms to many of its customers.

PRODUCT RANGE

Shrimp Feed	Tiger prawn feed,Scampi feed  Vannamei Feed Other Customized
Organic Feed
Processed Shrimp	Head onHead less tail on  Peeled Deveined Tail On Individually Quick Frozen Bread and Battered Cooked – Full Range Other Customized

About Promoters:

This section of Thapar Family after family settlement, is led by Mr Vikram Thapar. The group is primarily engaged in Coal mining and trading, real estate and in Aquaculture and feed processing through “The Waterbase Limited”.

Mr Vikram thapar is a chartered accountant and member of FICCI. As per media reports, Mr Thapar himself is a keen aqua culturist and has deep interest in the field.

Promoters’ stake increase: Promoters recently increased their stake via rights issue in October 2013. Additional 12.9 million shares were issued, resulting in 52.47% promoters holding. None of promoters holding is pledged. All these factors indicate positive signal towards the stock.

Shareholding (%)	Jun 2014	Sep 2013
Promoters	52.47%	32.01%
Non Institutions	47.51%	67.95%
Bodies corporate	3.13%	9.41%
Institutions	0.02%	0.04%

Industry Overview

Indian seafood product exports during 2013-14 recorded major jump of 59% in value terms as compared to 2012-13. The exports were Rs.29,500 crores as against Rs.18,856 crores in 2012-13. Shrimp exports accounted for 65% of the total sea food exports in value terms, an increase of 100% as compared to previous year. In the year 2012-13 the shrimp exports were Rs.9,608 crores. In the current year the shrimp exports are Rs.19,175 crores. In volume terms the shrimp exports grew by 33% from 2.26 lac MT in 2012-13 to 3.02 MT in 2013-14. The major export market has been USA, Europe, Japan and South East Asia during 2013-14 for shrimp exports. (Source: Annual report of Avanti Feeds Limited)

Sea food is a segment which has been registering tremendous growth in domestic sector as well. Given the rising incomes, Urban migration and changing food habits, we see a lot of demand for sea food in non-coastal regions of the country. It is reasonable to assume Sea food processed with high standards, will continue to grow at a healthy rate.

Improving financial position

Particulars	2014	2013	2012
Income from operations	22,768	15,663	10,347
Sales growth	45%	51%	124%
OPBDIT	2,321	1,178	1,047
PAT	1,357	601	563
EPS	3.52	2.33	2.19
Net Cash Accruals	1,537	882	810
Equity Share Capital	3,860	2,574	2,574
Total Shareholders’ funds	8,669	6,025	5,424
Total Debt	1,261	2,830	1,896
OPBDIT / Operating Income	10%	8%	10%
PAT/Operating Income	6%	4%	5%
Return on capital employed	24%	13%	12%
Return on Shareholders’ funds	16%	10%	10%
OPBDIT/Interest & Finance Charges	8.1	5.1	5.7
Net Cash Accruals / Adjusted Debt	1.2	0.3	0.4
Adjusted Gearing	0.1	0.5	0.3
Current Ratio	2.1	1.8	1.9

• Sales have grown consistently over the last few years.
• Net profit margin is healthy at 6%.
• Debt position is at a comfortable Debt/Equity ratio of 0.1 times.
• Company has given healthy returns on both capital employed and shareholders’ funds.
• Current ratio at 2 times is within comfortable range.
• P/E ratio at 9.3x shows the Company is fairly valued at present.

 Value anlaysis

P/E Ratio

EPS (March 31, 2014)	Market Price ((28 July, 2014)	P/E (trailing EPS)
Rs 3.52	32.90	9.3x

 P/BV Ratio

Book value per share (March 31, 2014)	Market Price ((28 July, 2014)	P/BV
Rs 22.45	32.90	1.46X

Comparative Analysis

Not many companies were available for exact comparison. I have done a comparative analysis with “Avanti feeds Limited”, a company also engaged in aquaculture activities.

Figures taken are for FY 2013-14

Particulars		Waterbase	Avanti Feeds (Consolidated)
Income from operations		22,768	113,160
OPBDIT		2,321	11,052
PAT		1,357	7,041
EPS		3.52	77.52
Total Shareholders’ funds		8,669	17,958
Total Debt		1,261	5,307
OPBDIT / Operating Income		10%	10%
PAT/Operating Income		6%	6%
Return on Shareholders’ funds		16%	39%
Adjusted Gearing		0.1	0.3
Market Price		32.90	836.65
Book value per share		22.45	198
P/E ratio		9.3x	10.8x
P/BV		1.46x	4.23x

Avanti feeds limited has a better scale of operations as compared to Waterbase Limited. Also, Avanti is more diversified. Also, there is not much difference on a P/E comparison between 2 companies.

Summary Balance Sheet (in Rs Lakhs)

Particulars	2014	2013	2012
TOTAL LIABILITIES	15,813	13,299	11,260
Shareholders’ funds	8,669	6,025	5,424
Share capital	3,860	2,574	2,574
Reserves & Surplus	4,808	3,451	2,851
Non Current liabilities	344	1,128	1,137
Long term borrowings	221	1,018	1,045
Long term provisions	122	109	92
Current liabilities	6,801	6,146	4,699
Short term borrowings	1,040	1,811	851
Trade payables	4,780	3,506	3,287
Other current liabilities	981	829	560
TOTAL ASSETS	15,813	13,299	11,260
Non Current Assets	1,732	1,951	2,240
Fixed assets	1,464	1,564	1,610
Other Non current assets	268	386	630
Current assets	14,082	11,349	9,020
Inventories	4,886	3,526	3,141
Trade receivables	4,838	4,579	3,440
Cash & Cash equivalents	2,490	1,668	1,236
Other current assets	1,867	1,576	1,202

Summary Profit & Loss account (In Rs Lakhs)

Particulars	2,014	2,013	2,012
Income from operations	22,768	15,663	10,347
Expenses	(20,447)	(14,485)	(9,300)
EBDIT	2,321	1,178	1,047
Depreciation	(180)	(281)	(246)
Finance cost	(287)	(232)	(182)
Other income	191	97	66
Profit from Ordinary activities	2,045	761	685
Exceptional item	(1)	(3)	(2)
PBT	2,044	759	683
Tax	(687)	(158)	(120)
PAT	1,357	601	563

 ** The stock analysis of Waterbase Limited including the financial analysis report linked above, is for informational purpose only. This analysis should not be taken as a buy/sell recommendation. The circumstances of the company and the economic environment may have changed since the date of this stock analysis. For an updated list of the best Multibagger stocks, visit here – Multibagger Ideas.

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