Gokul Refoils IPO Review & Recommendation

May 4, 2008

Gokul Refoils and Solvent Limited IPO

Public Issue Open: May 08, 2008 to May 13, 2008
Public Issue Price: Rs 175/- to Rs 195/-

Gokul is an established player and should be able to compete well in highly competitive and inherently low margin edible oil business.

Edible oil market in India will grow considering increasing consumption and economic development of India which presents a good opportunity to Gokul.

With increasing retail share Gokul should be able to increase its net profit margins

Valuations of Gokul are very reasonable considering price earning multiple of around 8 at upper band (annualized for 8 months ending November 2007). Gokul also comperes favourably with its peers like K.S. Oil (price earning multiple of around 22) and Ruchi Soya (price earning multiple of 12). Price to book multiple of Gokul at upper band is 1.64 which is again very reasonable

Gokul has a reasonable debt with its debt equity ratio at 0.45. Return on Net Worth has improved over the years and is quite decent at 27% for the 8 months ended November 2007. Return on Capital Employed is not good at around 15%.

Based on the above parameters we recommend subscribing to the issue.

For complete analysis please visit following link:
http://chittorgarh.net/t/11602263/673745/206845998/2/

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Posted in IPO