Gujarat Ambuja Exports: Maize Processor in Capacity Expansion

V.P. Rajesh and Saurabh Basrar of Banyan Capital Advisors presented their investment thesis on Gujarat Ambuja Exports Ltd. (India: GAEL) at Asian Investing Summit 2025.

Thesis summary:

Gujarat Ambuja Exports (GAEL) is India’s leading maize processing company and a compelling small-cap story with significant long-term growth visibility and margin expansion potential. As of April 2025, the company recently traded at ₹110 per share, implying a market capitalization of ₹5,045 crore and an enterprise value of ₹4,295 crore, with a net cash position of ₹750 crore. GAEL derives over three-quarters of its revenue and nearly 90% of its EBIT from its maize processing segment, which has grown revenue and EBIT at CAGRs of 20% and 24%, respectively, over the past 15 years. With a dominant market share of over 30%—up from less than 5% in 2009—and a wide geographical footprint, GAEL is poised to remain the country’s maize processor of choice.

The company is currently executing a 50% expansion in maize wet milling capacity from 4,000 to 6,000 TPD by March 2026, along with major investments in higher-margin starch derivatives and India’s first domestic fermented products plant, positioning GAEL for a product mix shift that supports both top-line growth and operating leverage. Management expects over 20% CAGR revenue growth for the next three to five years, supported by rising maize production in India, favorable government policies, and GAEL’s unmatched scale and raw material access. Already a high-ROCE business with 25% returns in its core maize division, GAEL is concentrating future capital deployment in this segment, which now accounts for 78% of the company’s total capital employed.

Despite these strengths, GAEL remains attractively valued relative to peers. At 9.5x EV/EBITDA and 16.3x P/E on a trailing basis, the company trades below comparable players such as Sanstar and Sukhjit Starch, despite superior growth rates, scale, and profitability. Projections under the base case scenario imply revenue of ₹6,000 crore and PAT of ₹563 crore by FY28, translating to a potential upside of 67–100% over the next three years, with a bull case scenario implying up to 200% upside. This valuation also does not fully reflect the optionality from a turnaround in the company’s agro-processing division and potential monetization of renewable energy assets.

Key risks include raw material availability, successful ramp-up of new fermentation capacity, and any recurrence of governance missteps. That said, the company’s balance sheet strength, consistent reinvestment from internal accruals, and history of execution provide a strong margin of safety. For investors looking for a capital-efficient, scalable business with dominant market share in an essential industry, GAEL offers an attractive combination of growth, value, and optionality.

Listen to this session:

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About the instructor:

V.P. Rajesh has been in the capital markets since 1991, first as an IT consultant (at Citicorp Overseas Software) and then as an Investment Banker for over 10 years specializing in mergers and acquisitions. During his banking career with J.P. Morgan Chase, Deutsche Bank, Piper Jaffray and Thomas Weisel Partners in New York and San Francisco, he focused on technology, media, telecom and healthcare sectors and completed transactions worth over $27 billion. V.P. relocated to India in July 2007 and started re-investing in the Indian stock market from March 2008 onward. He started Banyan Capital Advisors in New Delhi in November 2011 to manage outside capital using investment principles espoused by likes of Graham, Buffett, Munger, Klarman and Lynch. V.P. is an MBA from the University of Michigan’s Ross Business School with a distinction and has a B.E. (Hons.) degree from BITS, Pilani, India.

Saurabh Basrar is a Portfolio Manager at Banyan Capital Advisors. He has fifteen years of experience in portfolio management and equity research. His prior experience includes positions at Fidelity, A.T. Kearney, and Citibank. Saurabh is a rank holder chartered accountant, member of the CFA Institute, and a graduate of Sri Ram College of Commerce. He is also the author of the bestselling book, “Masterclass with Super-Investors”.

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