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Review By MLR Securities Private Ltd on May 18, 2011
Galaxy Surfactants manufactures surfactants and specialty chemicals in India for the personal and home care industry. The company has more than 60% market share in its product range of personal care performance chemicals. Its products cater to the some of the largest global brands in the FMCG sector and find applications in skin care, hair care, oral care, body wash, sun care, household cleaners and fabric care segments. Few of the global customers are Beiersdorf, Ecolab, Henkel, Diversey, L'Oreal, Reckitt Benckiser and Unilever. While the domestic customers include Ayur, CavinKare, Dabur, Emami, ITC, Marico, Procter & Gamble Home Products Limited to name a few.
Unnathan shekhar, Gopalkrishnan Ramakrishnan, Shahsikant Rayappa Shanbhag and Sudhir Datarram Patil are the promoters of the company.
The company presently has three manufacturing units at Tarapur, two manufacturing units at Taloja, Maharashtra and one manufacturing unit in USA which is owned by the company's 100% step-down subsidiary Maybrook Inc. The company has a R&D centre at Navi Mumbai to develop new products, technologies and applications for the Personal and Home Care industry. Galaxy has 18 patents in India and 10 patents in USA. In addition Galaxy has applied for 8 patents in India and 1 patent in Europe.
The company's promoters have over thirty years of experience in the chemicals industry. Mr Shekhar, managing director, was earlier associated with Hindustan Unilever (HUL) and Lupin Laboratories Ltd. Mr Ramakrishnan and Mr Shanbhag were earlier associated with Colgate Palmolive (India) Ltd, while Mr S. Patil was earlier associated with HUL.
The company's 60% market share in the domestic market & massive capacity expansion which will lead to volume growth make the issue attractive. Valuations of 13.5-14 times FY11 EPS are at a premium to the specialty chemicals industry average of 11, but we believe its niche product profile justifies the premium. We recommend investors with high risk appetite to Subscribe to the issue for long term time frame.
Review By MLR Securities Private Ltd on May 18, 2011
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