ASHU DUTT

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THE MULTIBAGGER
February 2011

GULSHAN POLYOLS Current Price: 82 Price Target: 240 Holding Period: 3 years Investment Rationale: At present, Gulshan Polyols has one of the largest manufacturing units for Mannitol in India. It proposes to increase its production capacity threefold to 12,000 MT/annum over the next two years. The company over FY10-11 also increased its capacity for Sorbitol from 30,000 45,000 MT to meet its increased demand from domestic and international markets Gulshan Polyols is also one of the largest in the country in producing Precipitated Calcium Carbonate (PCC), Ground Calcium Carbonate (GCC); Activated Calcium carbonates (ACC) and Wet Ground Calcium Carbonates (WGCC). The company manufactures these from its manufacturing facilities based out of UP, Gujarat and HP with a combined capacity in excess of 1.25 lakh MTPA, and is sufficient to meet the industrys demand over the next few years India has been importing Mannitol every year, and the imports have been growing at a rate of 10-15% every year. Such a gap offers immense opportunities to Gulshan polyols, one of the most prominent players in India to benefit from the huge demand supply gap in the country. The increase in production capacity is expected to result in revenue growing at a CAGR of 21% over the next 4 years. Increased demand and improved in-house production capacities coupled with non volatile costs are expected to result in Net income rising by 200% by 2014 from the FY2010 figure of INR 12.98 crores Operating cash flows grew 39% over 2008-2010. Enhanced business prospects and capacities shall further help a CAGR of 17% to INR 41 crores over the next three years Companys current EPS stands at 18.54. Increased revenues are expected to drive this number to INR 27.8 by 2014 The company is currently trading at a PE of 4.4 as against an approximate industry average of 13.62. Other players like Clariant chemicals, BASF and Himadri Chemicals are trading at a PE of 15.62, 15.18, and 14.44 respectively. Companys Debt has been reducing at a CAGR of 10% over the last two years. It further intends to reduce its debt by half over the next 2 3 years. The company possesses a highly experienced team of professionals and holds significant experience in various industries including FMCG, Food, Paper, Pharmaceuticals, Plastics and Printing etc. Its promoter, Dr. C.K. Jain is a doctorate in Chemistry Its clients include large domestic and international players like Asian paints, Dabur, Colgate, ITC, Unilever, Wipro, Ranbaxy etc. Long term engagements with a majority of these clients emphasizes strong uninterrupted profitable business operations for the company

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ABOUT THE COMPANY

THE MULTIBAGGER

Gulshan Polyols Ltd (GPL) is one of countrys leading manufacturers of Calcium Carbonate and specialty chemical Sorbitol 70%. GPL is also the largest exporter of Sorbitol from India with a presence in 16 countries covering three continents of Asia, Africa & Australia and an aggregate turnover in excess of INR 220 crores as on March 31, 2010. Its current product portfolio includes Calcium Carbonate, Sorbitol 70%, and Liquid Glucose. The company has recently also added Mannitol to its portfolio.

PRODUCT PORTFOLIO

OVERSEAS OPERATIONS

CALCIUM CARBONATE MANNITOL SORBITOL 70%

ASIA

LIQUID GLUCOSE

AFRICA

AUSTRALIA

It set up first of its kind On site PCC (Precipitated calcium carbonate) manufacturing plant in India with a capacity of 10,000 MTPA. Based on an environment friendly technology, the plant has been recorded in the Limca book of Records.

PRODUCTION CAPACITIES FOR CALCIUM CARBONATE

PRODUCTION CAPACITIES FOR OTHER PRODUCTS

UP (70,000 MTPA)

GUJARAT (35,000 MTPA)

LIQUID GLUCOSE (10,000 MTPA)

SORBITOL 70% (45,000 MTPA)

HP (20,000 MTPA)

Copyright 2011. Ashu Dutt. All Rights Reserved

www.ashudutt.com

ASHU DUTT
ABOUT ASHU DUTTS THE MULTIBAGGER

THE MULTIBAGGER

The Multibagger is Ashus pick of a stock that has the potential of appreciating 5-10 times over a period 3 years. These stocks are based on his understanding of an investment themes, a structural change in the business, a change in management or many other factors ABOUT ASHU DUTT Financial Market guru, Ashu Dutt is widely respected as an authority on investing in Indian financial markets and is widely read and sought for his advice by both institutional investors and individual investors Ashu is the author of market bestsellers and is currently writing 8 books including books like 15 Day trading Secrets, Finding Multibaggers, 22 Secrets to Reading Charts etc Ashu has been a nationally recognized financial expert and has been on CNBC, NDTV Profit and ET NOW Before returning to India in 1996, Ashu was Manager-International Taxes and Special Projects at Continental Grain Company, the worlds fourth largest private company and the second largest commodities and commodities options trader (and a member at the Chicago Board of Trade) headquartered in New York He has also worked as a Tax Policy Analyst with the Office of Tax Policy, New York City Department of Finance in New York . Ashu is a Certified Public Accountant certified in the State of Maryland, USA. He holds an M.B.A from Bernard M. Baruch College, City University of New York , New York . He also holds a B.B.A.(Summa Cum Laude) in Finance & Investments from Bernard M. Baruch College , City University of New York, New York. His specializations include Economics and Options&Futures. He is the recipient of the Baruch College Alumni Scholarship and has been listed in the Whos Who on the Deans List Ashu is respected across Asia for his expertise in Wealth Management, Private Equity, M&A and Real Estate Finance. He has been invited to speak by leading investment banks Barclays, Citibank, UBS and has been a key speaker at major conferences like Regional Capital Markets Conference. He is also a Master Trainer for top tier investment banks, private banks etc across AsiaAshu can be reached at ashu@ashudutt.com SUBSCRIPTION Please contact ashu@ashudutt.com for Subscription information

Copyright 2011. Ashu Dutt. All Rights Reserved

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ASHU DUTT

THE MULTIBAGGER

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Copyright 2011. Ashu Dutt. All Rights Reserved

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