Firstcall Research is bullish on Gulshan Polyols and has recommended buy rating on the stock with a target of Rs 65 in its April 13, 2013 research report.
“Gulshan Polyols Ltd. (GPL) was incorporated, to take over the Sorbitol project from Gulshan Sugars & Chemicals Ltd.GSCL) in terms of scheme of Arrangement/ demerger. GPL has six manufacturing facilities spread across five states in India and an established sales-distribution network across the globe. Manufacturing facilities are built over 150 acres of total land area. GPL has commissioned 10MW co-gen Power Plants at its various locations and employees over 1500 people. Focus on quality is maintained through in-house microbiology laboratory, including HPLC equipment. The plant was set-up in 1996 in the State of Gujarat in the parent company i.e.”
“Gulshan Sugars & Chemicals .The plant is equipped with International Quality Equipment and Technology having the largest capacity in India. The plant is capable to produce Crystalline and Noncrystalline grade of Sorbitol which is a unique feature as compared to other domestic plants. The present installed capacity is 30000 Tones of Sorbitol. Gulshan Group has diversified interests and is engaged in manufacture of various Industrial Chemicals for Multiple Applications in several companies. The Group was initially engaged in sugar business, which later diversified into the field of Industrial Chemicals. The Group set up its first Indigenous plant to produce ‘Synthetic Fillers’ popularly known as ‘Calcium Carbonate (Caco3) ‘Precipitated and Activated’ in the State of Uttar Pradesh where the high quality Limestone is available in plenty in nearby area. Gulshan Polyols Ltd and Gulshan Sugars & Chemicals Ltd both jointly appointed Price Waterhouse Coopers (PWC) to carry out the valuation exercise and to suggest entitlement ratio upon amalgamation / merger of Gulshan Sugars & Chemicals Ltd with Gulshan Polyols Ltd.”
“Gulshan Polyols Ltd is engaged in manufacture of various Industrial Chemicals for Multiple Applications & this group initially engaged in sugar business, reported its financial results for the quarter ended 31 DEC, 2012. The company’s net profit jumps to Rs.65.23 million against Rs.60.34 million in the corresponding quarter ending of previous year, an increase of 8.10 percent. Revenue for the quarter decline 6.75 percent to Rs.660.19 million from Rs.707.96 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.7.72 a share during the quarter, registering 8.10 percent increase over previous year period. Profit before interest, depreciation and tax is Rs.122.57 millions as against Rs.101.46 millions in the corresponding period of the previous year.”
“At the current market price of Rs 60, the stock P/E ratio is at 2.60 x FY13E and 2.33 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.26.61 and Rs.29.62 respectively. Operating Profit and PAT of the company are expected to grow at a CAGR of 9 percent and 15 percent over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 1.30 x for FY13E and 1.22 x for FY14E. Price to Book Value of the stock is expected to be at 0.39 x and 0.34 x respectively for FY13E and FY14E. We recommend ‘BUY’ in this particular scrip with a target price of Rs 65 for medium to long term Investment,” says Firstcall Research report.
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