Thursday, April 15, 2010

Tasty Bite - Multibagger Stock Update

Since my initial post on Tasty Bite stock at 222 four days ago, it has risen 44% to 320 - lifetime high and on lifetime high volumes of 1.6 lac shares today.Market cap on cmp is 82 crores ( vs 44 crores last week)
Below - Tasty Bite - 1 year Stock Price Chart
Recently magazine `Retail Merchandiser` posted an article on Tasty Bite. Some excerpts
  • Most of its products are Indian in origin, but recently the company has expanded into Pan-Asian, Mexican, and Mediterranean flavors. 
  • The company grows 40% of its vegetables on its own farm in India
  • Last year, Tasty Bite saw 38% growth. So far in its 2010 fiscal year, its already seen 50% growth, and CEO Ashok Vasudevan expects to top that in 2011. ( This implies that in FY11 TBEL expects sales to grow again at least of 50% or to 90-105 crores of Revenues thereby implying FY11 valuation of PSR / Price to Sales Ratio of 0.86x and FY11 forward PE Ratio of 8 ( assuming PAT also grows by 50%). Thus stock has good potential to double ,even from current levels to 600-700 levels if management delivers. ( On a shorter term technical basis stock looks overbought with being 160% above 200 DMA of 122 and 63% above its 50 DMA of 196. Might offer better entry opportunities on this basis)
  • He attributes the company’s success, in part, to a few specific initiatives starting in 2007: an expansion of its retail partners from less than 40 to 60; a champion in-store demo program that allowed Tasty Bite representatives to talk to more than 300,000 direct consumers; and three new product lines.

    1. The first is Tasty Bite’s simmer sauces, ready-to-cook Indian, Thai, and other Asian-inspired sauces. They have very little sodium and can therefore be seasoned however the cook sees fit. They come in inexpensive, single-use pouches designed for a family of four, making it easy to try all the flavors and spice up any meal.
    2.  The second, a range of flavored rices, hit the shelves this a year ago, offering families a convenient meal accompaniment in a wide variety of Indian, Asian, and Mediterranean flavors.   
    3.  It’s the third new product, Meal Inspirations, that Vasudevan said will be Tasty Bite’s big item for 2010. It is hitting store shelves right now and will be nationwide in the next few months. These protein dishes, made with lentils and other legumes, come in ready-to-eat pouches and are the result of a year of field research with families across the county.
     
  • To keep up with demand, Tasty Bite recently doubled its manufacturing capacity in India and is currently looking for manufacturing space in the US. It also upgraded its packaging technology; Tasty Bite was the first to commercialize retort pouches, which were invented by the Apollo space program to store food without preservatives or refrigeration.

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