EDL- Get ready for takover!!!
Issue Date :Nov 1- Nov 6
Issue Price :350 Rs - 400 Rs
Min. Order Quantity :15 Shares
Grade :Average
Recommendation :Subscribe
Company Info
Manufacturing of Indian-made foreign liquor (IMFL). Their Manufacturing unit Facilities are in
1) Mevaloorkuppam, in Tamil Nadu,
2) NIDA, Palakkad district, in Kerala.
Kerla and Tamilnadu are government controlled markets. In both the cases the company works through the government agencies and solely a price taker and heavily dependent on government policy
Objective of the Issue
1) Entry in AP & Karnataka market by setting up a 60 kilo litres per day (KLPD) grain-based distillery unit at Nellore district in AP.
2) Setting up blending and bottling IMFL plant (having a capacity of 0.70 lakh cases per month) at Nellore district in AP
3) Setting up a 7.5 MW bio-mass power plant and expansion of its existing distillery plant by increasing capacity from 3.20 lakh cases to 5 lakh cases per month. (Capacity utilization of 100%).
4) Increasing the capacity of its ENA plant from 20KLPD to 70 KLPD.
5) Relocation of unit to Karnataka.
6) Developing 2 lakh sq.ft residential space in Mevalorkuppam in Tamilnadu.
Valuation
The company is valued at around 41 to 47 times its FY07 earnings.
Taking into account the entry into new markets and windmill power generation though on a small scale will gradually add value to the company. Company may further get carbon credits which we are not discounting as on date.
The real estate foray will be the real bonus in the times to come. The company seems serious about this business and if it goes through there will be a phenomenal rise in bottomline in FY2010. The profit per square foot is estimated at Rs 2000.
The company looks good as a takeover target for UB group.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment