Performer Stock in Falling Market - DFM FOOD

DFM Foods Ltd. is an India-based company. The company is engaged in the manufacturing and marketing of processed foods, which includes snack foods. The Company operates in one business segment, which includes FOODS. The company was incorporated in the year 1993. This business pioneered the entry of packaged snacks in the Indian market with the introduction of its Crax Corn Rings product. Today with sales spanning all of North and parts of Central India, our Crax and Natkhat brands are amongst the most popular in the Industry. 

  • The companys products are sold through an extensive Distribution network spanning the states of Delhi, Uttar Pradesh, Punjab, Haryana, Uttararnchal, Himachal, Jammu & Kashmir, Rajasthan and Madhya Pradesh. The markets are covered and serviced by committed Sales Team. 
  • The Companys processing facility is located at Ghaziabad in the state of Uttar Pradesh in close proximity to the Companys Corporate office in Delhi. The facility makes use of state of the art manufacturing equipment from across the globe to ensure consistency and quality of all its products. 
  • Corn Rings and Wheat Puffs are marketed under the CRAX and NATKHAT brand names respectively. Both these have become extremely popular snacks, especially among children. 
  • In the namkeens segment, the company offers a complete range of products consisting of 13 distinct product variants that include Bhujiyas, Daals, Mixtures and Nut-Mixes These are sold in several pack sizes to cater to both casual / impulse consumption as well as consumption at home. 

DAILY CHART DFM FOOD

Fundamental Analysis 

DFM Foods Ltd. is engaged in the business of manufacturing, selling and marketing of packaged snack foods and has been a leader in the space for over 25 years. This business pioneered the entry of packaged snacks in the Indian market with the introduction of its Crax Corn Rings product. Beta of the stock for one month range is 0.080 . Product range: Corn Rings and Wheat Puffs are marketed under the CRAX and NATKHAT brand names respectively. Both these have become extremely popular snacks, especially among children.In the namkeens segment, company offers a complete range of products consisting of 13 distinct product variants that include Bhujiyas, Daals, Mixtures and Nut-Mixes. These are sold in several pack sizes to cater to both casual / impulse consumption as well as consumption at home. 

  • The Company has a good return on equity (ROE) track record: 3 Years ROE 31.43% 
  • Company has been maintaining a healthy dividend payout of 24.08% • Net profit of the company has doubled in this quarter and sales also have increased 
  • PBDIT also jumped from 7.91 to 13.74 in the quarter
  • Bought buy 5 mutual fund schemes 
  • Net sales of the company has increased from 2.63 cr to 6.55 cr in the last quarter 

Technical Analysis 

DFM Foods rallied near 65 percent in the last one year, It gave strong signal to buy on Daily and weekly charts. In the last week of November the stock again managed to break above psychological level of 2000 and sustained above this level, also managed to give weekly closing above 2000. It gave break out of the consolidation range of last 18 days, heading towards its all-time high levels near 2150. The only concern in break out is low volume but expected to increase when break above 2100. 

  • The stock formed a pennant pattern on daily chart with ascending triangle in it. 
  • If we draw an Internal trend line from the highs of June and August 2017, then it clearly supports the Pennant Pattern 
  • If we calculate the target range of Pennant pattern, it is around 2450-2460 
  • Higher Volume with break out will confirms the continuation of uptrend in the first week of December 
  • 1800 is the Key support and stock should not give weekly closing below this level if it has to go in an uptrend 

Buy DFM Foods between 2000 and 2050 is recommended for the target of 2400 to 2600 and maintain stop loss below 1800 

Supports and Resistance (Monthly) 

  • Resistance 1- 2150 Support 1- 1800 
  • Resistance 2- 2400 Support 2- 1580 
  • Resistance 3- 2700 Support 3- 1370