Thread by @alphaspotcap

Gulshan Polyols Analysis!

Here’s everything about the company: It’s business, peers, future prospects, key risks , financials and more!

A detailed thread below 🧵👇🏻
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About -

Gulshan Polyols Ltd is a multi-product manufacturing company, which operates in the chemical industry.

The Company caters to a range of industry markets, such as pharmaceuticals, personal care products, footwear, tires, rubber & plastics, paints, alcohol etc.

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It is the manufacturer of

1. Starch Sugar & its derivatives like Sorbitol, Liquid Glucose, Malto Dextrine etc.

2. Calcium carbonate

3. Alcohol business

4. Agro-based animal feed derived from corn and rice.

5. Manufacturing of paper through on-site PPC plant

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Clientele-

1. FMCG - Colgate, britannia, Dabur

2. Paints - Asian Paints, Nerolac, Berger, Shalimar Paints

3. Pharma - Torrent, glenmark, novartis, cipla, ipca

4. Footwear - Relaxo, Bata, Paragon

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More Clients

5. Paper - ITC, Century, TNPL

6. Cables - Sriram cables, Delton cables, Polypack

7. Plastics - Supreme, polyplast

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Business Division-

Gulshan Poly has 3 divisions:

1. Grain Processing Division-

This division deals with production of starch and starch derivatives. Which are produced from maize & rice.

It is one of India’s largest producer and exporter of Sorbitol.

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Sorbitol’s application-

1. Textile and Leather application
2. Emulsion Products
3. Tobacco Industry
4. Adhesive Applications
5. Pharmaceutical industry

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Other business division-

2. Ethanol & Distillery:

The company produces ethanol from damaged food grains. Company also manufactures whiskey

3. Mineral Processing Division -

It is the largest producer of calcium carbonate in India. Clients are pharma, paper, adhesive

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Segment wise revenue breakup-

1. Grain Processing - 75.5%

2. Ethanol & Distillery - 16.5%

3. Mineral Processing - 8%

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Peers -

1. Sukhjit Starch & Chemicals Ltd

2. Gayatri BioOrganics Ltd

3. Gujarat Ambuja Exports Ltd

Market Share-

• Domestic market share of 35% in Sorbitol business

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Future Prospects-

1. Company is doing capex to increase Ethanol capacity. Revenue from this segment is forecasted to rise due to the government 20% blending target by 2023. Use of damaged & broken food grains to produce ethanol will have a positive impact on margins.

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2. Sorbitol being a raw material in many finished goods is expected to witness huge demand as many industries are back to pre-covid production levels

3. Company is planning expansion in the grain processing division due to high forecasted demand.

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Risk:

1. Increasing coal prices while will result in increasing power & fuel cost affecting PAT

2. Major source of revenue is coming from the Grain processing division in which maize is used to produce sorbitol. Bad harvest of maize is unfavorable.

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Financials-

1. Significant rise seen in revenues from Grain Processing Division, increased by 52% (YoY).

2. 39% increase in total income (YoY), however total expense increased by 47% (YoY) due to high raw material cost.

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Shareholding Pattern:

1. Promoter holding - 68.2%
2. FII - 0.22%
3. Public - 31.41%
4. Other - 0.17%

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Gulshan Polyols Limited is a multi location, multi product manufacturing company and has become a market leader in most of its products in India with global presence in 35 countries, across 3 continents.

It’s aim is to create new niches in existing markets.

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With a very diversified products to offer. It still relies heavily on one product. So it remains interesting to see how they reduce that risk going forward!

It looks geared up to cash on new opportunities and continue to make money for its shareholders!

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What’s your view about its complex business?

@caniravkaria @saketreddy @DhanValue @harshmadhusudan @Anshi_________ @kuttrapali26 @Arunstockguru @stockifi_Invest

Comment down below!