GULSHAN POLYOLS LTD -A Diamond Doesn’t Lose Its Value Due To Lack Of Admiration.

We are seeing the future of Indian markets , with Modi driving his ministers and running the government just like a any other corporate company - Everything seems possible !!!

We are entering a new era ,with sentiments picking up for investments, will see more peaks coming than never. With Investors  understanding the reality and rightly willing to give time for Modi to fix things, we don't expect sharp falls in the markets. In fact it remains a buy on dips, considering that one has 2 to 3 years horizon .

Well this month's pick Gulshan Polyols Ltd. (GPL) seems to be a sure shot value stock from most of the ways.We believe Markets will always appreciate if a small cap company performs well in tough business environment. Having said that, we have seen a good appreciation on the price of the stock in the last 6 months. However if one sees the growth potential, even now its not late !!!

Company background

Gulshan Polyols Ltd (GPL) was incorporated in year 1981 as Gulshan Sugars & Chemicals Limited with primary business of manufacturing Calcium Carbonate both Precipitated Calcium Carbonate (PCC) and Activated Calcium Carbonate (ACC) with an initial capacity of 2100 MTPA at Muzaffarnagar, U.P. GPL is a manufacturer of Calcium Carbonate and specialty chemical Sorbitol 70%.

Product highlights

Calcium Carbonate

used as raw material in various industrial sectors such as Tooth Paste, Pharmaceuticals, and PVC products, Rubber, Plastic, Polymer, Cable, Leather, Paper and Paints etc.

Sorbitol

is a water soluble polyhydric alcohol having sweet taste and high stability. It used as a raw material in various industrial sectors such as Tooth Paste, Pharmaceuticals, Vitamin-C, Cosmetics, Paper and Paints etc.

For a detailed analysis of applications and the products manufactured by GPL , go here Gulshan india.

Manufacturing facilities

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.

Promoters background

Too much information available and its better one looks at it personally. Hence Insist readers to please go here Promoter details

Promoter Holding

Promoters have made open market purchases for the last 2 years. Consistent acquisitions has helped promoters to holding near to 75% from as low as 64%. 

Super bullish !!!

Indus Spirits

GPL entering into a new vertical of Alcohol division under the Brand name of INDUS SPIRITS at Industrial Area Boregaon Distt, Chhindwara (M.P). The interest lies in the manufacture and sale of GENA (Grain Extra Neutral Alcohol), GRS(Grain Rectified Spirits), DWGS / DDGS, IMFL and CL. 

Adding value to business!!!

Client base

It enjoys an esteemed customer profile including some of the most trusted names in the world like Colgate-Palmolive, Hindustan Unilever, Asian Paints, Wipro, Cipla, Ranbaxy etc. It is also the largest exporter of Sorbitol from the country with a presence in 16 countries covering three continents of Asia, Africa & Australia. GPL has been recently recorded in Limca Book of Records, 2010, for pioneering in setting up the first on-site PCC plant in the country.

Excellent performance

Company has posted good consistent profit growth of 26.8% over last 5 years. Company has achieved compounded sales growth of 23.2% and ROE (return on equity) is 18% over last 5 years.

Moreover company has paid consistent dividends also!

Recent updates

Recently GPL has commissioned some plants.

• 3rd Onsite PCC plant commissioned at west bengal shall supply for cigarette paper making plant of ITC.

• Commissioned production of Indian made foreign liquor under the brand 'Tiger Gold'.

• Commissioned plant for manufacturing Dextrose mono hydrate, liquid glucose at U.P.

• Commissioned plant for manufacturing sorbitol with latest technology and equipment's at gujarat.

With all the bullets loaded , we expect GPL to start firing !!

Conclusion

Value investors should always foresee the structural shift happening in the business. We see that its happening now in Indian markets. At least expected to happen !! Such markets rally for years. Long term investors should rightly select companies and not simply jump to any stock which is seeing north direction.

GPL has good market share and supply products for sectors which are mostly coupled with GDP growth. This seems to the right time to invest in GPL for us. With well experienced management its just matter of time to get noticed by some big investors and then the real story begins for the stock.

The diamond is just on a sale. Its available at an discount and nobody is realizing this gem. By the time you realize it, it would be far more costlier !!

Suggest to go for SIP .If we see any mild corrections post-budget, GPL should be accumulated.At CMP ~200 it is not yet late to get in.

Safe Investing.