FREE Equity Delivery and MF
Flat ₹20/trade Intra-day/F&O
|
Review By Chittorgarh.com Team on May 4, 2008
Financial Statements Data | |||||
(Rs Cr) | 8N07 | YM07 | YM06 | YOY | YM05 |
Total Income | 1347.8 | 1599.9 | 1259.7 | 27.00 | 1123 |
Net Profit | 41.82 | 25.72 | 12.38 | 107.75 | 19.99 |
Net Profit Margin | 3.10 | 1.61 | 0.98 | 1.78 | |
Net Worth | 172.92 | 126.47 | 100.60 | 25.72 | 87.91 |
Fixed Assets | 161.57 | 115.47 | 69.36 | 55.13 | |
Inventories | 316.93 | 163.66 | 99.20 | 82.93 | |
Cash and bank balances | 74.69 | 50.80 | 57.91 | 97.52 | |
Loans and Advances | 30.71 | 18.57 | 16.38 | 15.67 | |
Sundry Debtors | 92.79 | 98.63 | 48.66 | 41.29 | |
Long Term Debt | 133.02 | 89.57 | 29.52 | 31.96 | |
Current Liabilities | 363.90 | 230.26 | 153.66 | 160.83 | |
Deferred Tax Liability | 12.03 | 11.26 | 6.33 | 6.38 | |
Issue Related Facts | |||||
No of Shares before the issue (Cr) | 1.92 | ||||
No of Shares after the issue(Cr) | 2.63 | ||||
Share Price at upper band | 195 | ||||
Share Price at lower band | 175 | ||||
Net Worth after the issue at upper band (Cr) | 312.50 | ||||
Net Worth after the issue at lower band (Cr) | 298.19 | ||||
Book Value after the issue at upper band (Rs) | 118.82 | ||||
Book Value after the issue at lower band (Rs) | 113.38 | ||||
Valuations | |||||
EPS(last twelve months) (Rs) | 23.85 | ||||
Price Earning Ratio at upper band | 8.18 | ||||
Price Earning Ratio at lower band | 7.34 | ||||
Return on Average Net Worth (%) | 27.94 | 22.65 | 13.13 | ||
Return on Average Capital Employed(%) | 16.02 | 14.86 | 9.90 | ||
Long Term Debt/Equity at upper band | 0.43 | ||||
Long Term Debt/Equity at lower band | 0.45 | ||||
Price to book value at upper band | 1.64 | ||||
Price to book value at lower band | 1.54 |
Legend
8N07: 8 months ending November 2007
YM07: Full year ending March 2007
YM06: Full year ending March 2006
YM05: Full year ending March 2005
Other Listed Players in the Edible Oil Business
1. Ruchi Soya: Groundnut oil, Soyabean oil, Sunflower oil,Mustard oil, Palm Oil & Vanaspati
2. K. S. Oil: Mustard oil, Vanaspati, De-oiled Cake, Soya refined oil
3. Vimal Oil and Foods: Cottonseed, Groundnut, Soya, Mustard & Palm
KS OIL | RUCHI SOYA | ||||||
YM08 | YM07 | YOY | YM08 | YM07 | YOY | ||
Total Income | 2051.6 | 1071.58 | 91.46 | 11020.49 | 8569.87 | 28.60 | |
Net Profit | 122 | 57.32 | 112.84 | 157.37 | 102.96 | 52.85 | |
Net Profit Margin | 5.95 | 5.35 | 1.43 | 1.20 | |||
Shares | 33.24 | 18.88 | 18.88 | ||||
EPS | 3.67 | 8.34 | 5.45 | ||||
Share Price | 82 | 101 | |||||
PE | 22.34 | 12.12 | |||||
M Cap | 2725.68 | 1906.88 |
1. Established position and experienced management
Established position in the edible oils industry & locational advantage arising from close presence to ports as well as oilseed growing belt.The promoters have long experience in this line of activity.
2. Versatile manufacturing capabilities
Ability to process various types of oils including Palmolein, soyabean,cotton, sunflower, groundnut and mustard. The existing setup is such that Gokul can switch over from processing of one type of oil to another type of oil with the no down time.
3. Growth prospects of Indian edible oil market
Buoyant growth prospects for the edible oil market in India.
4. Distribution Network
A well established network spread across 19 States catered by 18 C&F agents and their 802 distributors, 3 depots, 15 brokers and their 295 resellers, distributing products through a total 1133 bulk points of presence.
5. Increasing retail share
Gokul succeeded in increasing its retail sales approximately from 18 % to 30 % which has significantly helped it to improve the margins. The portion of retail sales were 37% during the eight months period ended November 30, 2007.
1. Significant Competition
During the financial year 2006-2007, the edible/non-edible oil sales accounted for 86.6% of Gokul's total revenue. We face intense competition from both its direct competitors and bulk importers of edible oil in India.
2. Government Policy
Any significant change in the government policies relating to Excise and Customs could adversely affect Gokul's business.
3. Commodity Trading
Gokul is engaged in trading. The edible oil trade is speculative in nature and could lead to significant losses.
4. Low Margins
The business is characterized by inherently low margins.
This Issue has been graded by ICRA Limited as 3/5 indicating Average Fundamentals, pursuant to the SEBI Guidelines.
Listing Gains
1. Listing gains possibility depends on the market sentiment at the time of listing.
2. Considering that issue is priced at very reasonable valuations chances of loosing money are slim. But in case market crashes market price can dip below the issue price considering that Gokul is not a very big name.
3. Predicting listing price is totally speculative but if we were to speculate Gokul should list at Rs 250.
4. It would be un-reasonable to expect a share price of more than 275 shortly after listing.
Long term Gains (atleast 6 months)
1. Investors subscribing for long term should get a decent return on their investment.
1. Gokul is an established player and should be able to compete well in highly competitive and inherently low margin edible oil business.
2. Edible oil market in India will grow considering increasing consumption and economic development of India which presents a good opportunity to Gokul.
3. With increasing retail share Gokul should be able to increase its net profit margins
4. Valuations of Gokul are very reasonable considering price earning multiple of around 8 at upper band (annualized for 8 months ending November 2007). Gokul also compares favorably with its peers like K.S. Oil (price earning multiple of around 22) and Ruchi Soya (price earning multiple of 12). Price to book multiple of Gokul at upper band is 1.64 which is again very reasonable
5. Gokul has a reasonable debt with its debt equity ratio at 0.45. Return on Net Worth has improved over the years and is quite decent at 27% for the 8 months ended November 2007. Return on Capital Employed is not good at around 15%.
6. Based on the above parameters we recommend subscribing to the issue.
Review By Chittorgarh.com Team on May 4, 2008
FREE Intraday Trading (Eq, F&O)
Flat ₹20 Per Trade in F&O
|