
	KS OIL

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SHARETIPSINFO >>Research Reports >> K S OIL (03-02-2009)

LISTING	NSE
CMP	Rs 41.85
52 WEEK HIGH/LOW	Rs 100/Rs30
FACE VALUE	Rs 1
Market Cap.	Rs 1514 CRORE
PE	9
BETA	1.1

COMPANY OVERVIEW:
K S OIL established in 1985 is today India’s leading integrated edible oil company. K S OIL is promoted by Garg family. Company is leader in the mustard oil in India, K S OIL today enjoys 7% market share in the overall mustard oil segment with a dominant 25% market leadership in branded mustard oil.

Various Brands:
Mustard Oil-Kalash
Mustard Oil-Double Sher
Refined Oil-K S Soya Refined
OIL-K S Gold
Vanaspati- K S Gold Vanaspati
Vanaspati –K S Gold Plus

Distribution Network:
K S Oil reaches the final consumer through 450 distributors and 45000 retailers. K S Oil prefers rail to road for reaching its finished product. It also has major depot at major railway arrival points.

INDUSTRY OVERVIEW:
The size of edible oil industry is pegged at Rs 600bn of which mustard oil accounts for 20% (120bn). The industry is expected to grow at rate of 6% pa. Within the industry the branded segment today accounts for 15% of the market share and is growing at rate of 20%.
India has the fourth largest edible oil industry in the world after USA, China and Brazil and accounts for 7% of the global production and 10% of the global consumption each year.
Today northern and eastern Indian states are the largest consumer of the edible oil. This state consumes around 80% of the total mustard oil.

K S OIL SALES BREAK UP:

	FY2008	2QFY2008	2QFY2009	%CHANGE
BRANDED
1.DOUBLE SHER	349.8	85.3	138.7	62.70%
2.KALASH	420.8	98.5	140.4	42.50%
3.KS REFINED	407.6	82.8	165.3	99.70%
4.KS GOLD VANASPATI	47.2	10.3	17.6	72.10%
UNBRANDED
1.LOOSE MUSTARD OIL	198.4	53.3	58	8.80%
2.LOOSE REFINED OIL	149.8	48.8	53.4	9.90%
OTHERS	467.1	61	159.9	162.70%
TOTAL	2040.7	440	733.3	66.80%

SHAREHOLDING PATTERN:

	NO. OF SHARES	% OF TOTAL
PROMOTER	136197478	38.23%
INSTITUTION	41998637	11.79%
GENERAL PUBLIC	178078375	49.98%
GRAND TOTAL	356274490	100%

FINANCIAL:

	31/03/05	31/03/06	31/03/07	31/03/08
TOTAL INCOME	455.65	604.68	1073.6	2051.57
EXPENDITURE	-441.29	-575.54	-979.77	-1815.84
OPERATING INCOME	14.36	29.14	93.83	235.73
DEPRECIATION	-2.53	-2.85	-4.24	-11.94
PBIT	11.83	26.29	89.59	223.79
INTEREST	-7.71	-7.84	-14.96	-38.44
PBT	4.12	18.45	74.63	185.35
TAX	-0.76	-2.4	-13.4	-62.65
PAT	3.36	16.05	61.23	122.7

CHANGE IN TOTAL INCOME: CAGR IN TOTAL INCOME FOR 4 YEAR PERIOD IS 65.1%.

CHANGE IN OPERATING PROFIT: CAGR IN OPERATING PROFIT FOR 4 YEAR PERIOD IS 154%.

CHANGE IN NET PROFIT: CAGR IN NET PROFIT FOR 4 YEAR PERIOD IS 231%.

RATIOS:

		31/03/05	31/03/06	31/03/07	31/03/08
	EPS	0.094382	0.450843	1.719944	3.446629
	OPM	3.151542	4.819078	8.739754	11.49022
	NPM	0.737408	2.654296	5.703241	5.980785
INTEREST COVERAGE		1.534371	3.353316	5.972667	5.8218

Q3 FY2009 COMAPRISON WITH Q3 FY2008:

	Q3FY2008	%CHG	Q3FY2009
TOTAL INCOME	565.39	47.90%	836.19
EXPENDITURE	-504.42		-744.47
OPERATING PROFIT	60.97	50.43%	91.72
DEPRECIATION	-3.09		-6.75
PBIT	57.88		84.97
INTEREST	-8.48		-19.4
PBT	49.4		65.57
TAX	-16.97		-22.49
PAT	32.43	32.83%	43.08

TOTAL INCOME INCREASED BY 47.9% IN Q3FY2009 AS COMAPRED TO Q3FY2008.
OPERATING PROFIT INCREASED BY 50.4% IN Q3FY2009 AS COMAPRED TO Q3FY2008.
NET PROFIT INCREASED BY 32.38% IN Q3FY2009 AS COMAPRED TO Q3FY2008.

VALUATION&OUTLOOK:
At CMP the stock is trading at 9x to the FY2009E earning and 6x to the FY2010E earning. We expect the stock to trade at 8 x that makes the fair value Rs 58.8. SO there is good upside in the stock.

CONCLUSION:
Investors with medium to long term outlook could take position on the counter. The time horizon is one year.

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