Started in 1992, Galaxy Surfactants Limited is, Mumbai, India based, one of India's leading manufacturers of surfactants and other speciality ingredients for the personal care and home care industries. The products used in a host of consumer-centric personal care and home care products like, skin care, oral care, hair care, cosmetics, toiletries and detergent products. Currently, its product portfolio comprises over 200 product grades, which are marketed to more than 1,700 customers in over 70 countries. Company's products are organised into the following product groups:1. Performance Surfactants: Its portfolio of performance surfactants comprises over 45 product grades, and includes anionic surfactants and non-ionic surfactants.2. Speciality Care Products: Its Speciality Care Products group comprises over 155 product grades, and includes amphoteric surfactants, cationic surfactants, UV filters, preservatives, preservative blends and surfactant blends, speciality ingredients such as mild surfactants, syndet and transparent bathing bars and proteins, fatty alkanolamides and fatty acid esters, and other care products. GSL is a global supplier to FMCG companies across major geographies, such as Africa Middle East Turkey (AMET), Asia Pacific (APAC), Americas (North and South) and Europe. Company's diversified customer base currently comprises FMCG companies like, Cavinkare Private Limited, Colgate-Palmolive (India)Limited, Dabur India Limited, Henkel, Himalaya, L'ORÉAL, Procter & Gamble Home Products Private Limited, Reckitt Benckiser and Unilever. Its Step-down Subsidiaries, coupled with its manufacturing facilities in Suez, Egypt, and New Hampshire, USA, enables them to service the international demand for their products. Company has set-up sales offices in India, Egypt and USA, and representative offices in Netherlands and Turkey. GSL has in-house R&D team focuses on the development of high-performance products and formulations for the consumer-centric home and personal care industries, including collaborative product development with their customers. Since 2002, a total of 47 patents have been granted to GSL. Currently, 10 patents in USA, and 2 (two) patents each in China, the European Union, India, Japan and Russia, are being maintained by company. GSL has applied for an aggregate of 38 patents globally, of which 21 applications have been made in India, and an aggregate of 17 applications have been made for the registration of patents in Brazil, China, the European Union, Russia and USA, and under the Patent Cooperation Treaty. At present, GSL have 7 manufacturing facilities, out of which 5 are located in India and 2 are located overseas. GSL also has set-up one pilot plant at Tarapur, Maharashtra, for the scaling up of new products and processes from lab-scale to plant-scale. Out of our 5 manufacturing facilities in India, 3 are located at Tarapur, Maharashtra, 1 is located at Taloja, Maharashtra, and 1 is located at Jhagadia, Gujarat and company has over 1,200 employees. Many of its key customers have audited and approved its manufacturing facilities and processes, which has helped them to establish reputation and reliability as a supplier of high-quality products and customised solutions, and also enabled them to receive recurring business as well as attract new customers. On financial performance front, GSL has posted turnover/net profits of Rs. 1582.27 cr. / Rs. 0.28 cr. (FY13), Rs. 1701.58 cr. / Rs. 75.98 cr. (FY14), Rs. 1876.03 cr. / Rs. 67.46 cr. (FY15), Rs. 1808.76 cr. / Rs. 102.72 cr. (FY16) and Rs. 2171.70 cr. / Rs. 146.31 cr. (FY17). For H1 of FY18, it has reported net profit of Rs. 75.16 cr. on a turnover of Rs. 1197.28 cr. Thus company has posted healthy growth over last couple of years on consistent basis. GSL has posted an average EPS of Rs. 33.46 and average RoNW of 21.61% for last three fiscals. Issue is priced at a P/BV of 8.26 as per NAV after issue. It has no listed peers to compare with as per RHP. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 35. So issue looks fully priced. This is the company's second attempt to go public. Earlier in 2011, Galaxy Surfactants had entered the capital markets to raise over Rs 200 crore through an initial share sale. However, it withdrew from the IPO market due to tepid response from investors. As per financials, company's growth is very good, RoNW is 21.61% for last three fiscals and issue is priced at P/E of around 35. Company manufactures products for personal care and home care industries and has clients across the globe with some of the leading brands of FMCG. GSL is working in high entry barrier industry and growth of FMCG companies will be good with development of economy. So, we give SUBSCRIBE rating to this IPO.
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