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Check Before You Invest : Ambo Agritec Ltd

BSE: 543678 NSE: ISIN: INE0N6V01016
  |   Sector:  FMCG   |   Industry:  Edible Oil

Snapshot

Q.1 Which industry/sub-sector does Ambo Agritec Ltd belong to?
Ambo Agritec Ltd belongs to the FMCG sector, operating specifically within the Edible Oil segment.
Q.2 Is Ambo Agritec Ltd a good quality company?
Ambo Agritec Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Ambo Agritec Ltd undervalued or overvalued?
Ambo Agritec Ltd appears Somewhat Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 17.78 29.78
Price to Book 0.66 1.63
Price to Sales 0.28 0.42
EV to EBITDA 10.53 15.45
Q.4 Is Ambo Agritec Ltd a good buy now?
Ambo Agritec Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Ambo Agritec Ltd?
Ambo Agritec Ltd revenue growth is 18.7% for FY-2025, which is above its 5-year CAGR of 10.34%, indicating faster growth.

Q.2 Gross Profit margin of Ambo Agritec Ltd?
Ambo Agritec Ltd Gross profit margin which is the profit after deduction of direct costs, is 2.5% for FY-2025, which is above its 5-year median of 2.1%, indicating increasing margins.

Q.3 Operating Profit Margin of Ambo Agritec Ltd?
Ambo Agritec Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 2.21% for FY-2025, which is below its 5-year median of 2.87% indicating decreasing margins.

Q.4 Net Profit Margin of Ambo Agritec Ltd?
Ambo Agritec Ltd Net Profit Margin is 1.59% for FY-2025, is above its 5-year median of 1.39%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 2.5 2.1
Operating Profit Margin (%) 2.21 2.87
Net Profit Margin (%) 1.59 1.39

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Ambo Agritec Ltd?
Ambo Agritec Ltd Return on Asset is 3.5%, which is in line with its 5-year historical median of 3.5%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Ambo Agritec Ltd?
Ambo Agritec Ltd Return on capital employed is 10.03% for FY-2025, which is below its 5-year historical median of 11.12%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Ambo Agritec Ltd?
Ambo Agritec Ltd Return on equity is 7% for FY-2025, which is below its 5-year historical median of 7.97%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Ambo Agritec Ltd?
Ambo Agritec Ltd Cash conversion cycle is 97 days, above its 5-year historical median of 78 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 2.2 2.51
ROE (%) 7 7.97
ROCE (%) 10.03 11.12
Cash Conversion Cycle 97 days 78 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Ambo Agritec Ltd?
Ambo Agritec Ltd Debt-to-Equity ratio is 0.45, which is above the industry average of 0.15, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Ambo Agritec Ltd?
Ambo Agritec Ltd Debt to cash flow from operations is -0.65, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Ambo Agritec Ltd?

Q.1 Promoter shareholding and pledge status of Ambo Agritec Ltd?
Promoters hold 48.78% of the Ambo Agritec Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Ambo Agritec Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Ambo Agritec Ltd vs industry peers?
Ambo Agritec Ltd revenue CAGR is 10.34%, compared to the industry median CAGR of 4.81%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 18.7 4.8
Gross Profit Growth (%) 46.6 18.9
Operating Profit Growth (%) -7 15.6
Net Profit Growth (%) 36.4 22
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.2 2.52
ROE (%) 7 7.9
ROCE (%) 10.03 11.17
Cash Conversion Cycle (days) 97.38 45

Valuation & price assessment

Q.1 Stock return of Ambo Agritec Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of -14.92% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - -14.9% -79.5%
Q.2 Valuation ratios of Ambo Agritec Ltd vs historical?
The current P/E ratio of 17.78 is lower than its historical median of 29.78, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 17.78 29.78 29.43
Price to Book 0.66 1.63 2.26
Price to Sales 0.28 0.42 0.65
EV to EBITDA 10.53 15.45 16.89

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