Imtiaz Qureshi of Investia Financial feels that one should invest in KS Oils at Rs 14.
Qureshi told CNBC-Awaaz, “Investors should invest in KS Oil at Rs 14. The stock may go up to Rs 16-19 in future.”
The company's trailing 12-month (TTM) EPS was at Rs 4.42 per share. (Mar 2011). The stock's price-to-earnings (P/E) ratio was 2.74. The latest book value of the company is Rs 32.51 per share. At current value, the price-to-book value of the company was 0.37. The dividend yield of the company was 1.48%
MY VIEWS ABOUT K.S.OIL:
K S Oils is a leading integrated edible oil
company and is the trusted name behind renowned brands like Kalash, Double
Sher, K S Gold, among others. Their consumer brands and products in mustard
oil, soybean oil and palm oil are a household name with Indian consumers who
use our oils regularly as a healthy cooking medium.
Qureshi told CNBC-Awaaz, “Investors should invest in KS Oil at Rs 14. The stock may go up to Rs 16-19 in future.”
The company's trailing 12-month (TTM) EPS was at Rs 4.42 per share. (Mar 2011). The stock's price-to-earnings (P/E) ratio was 2.74. The latest book value of the company is Rs 32.51 per share. At current value, the price-to-book value of the company was 0.37. The dividend yield of the company was 1.48%
MY VIEWS ABOUT K.S.OIL:
K S Oils is a leading integrated edible oil
company and is the trusted name behind renowned brands like Kalash, Double
Sher, K S Gold, among others. Their consumer brands and products in mustard
oil, soybean oil and palm oil are a household name with Indian consumers who
use our oils regularly as a healthy cooking medium.
A leader in mustard oil in India, K S Oils today enjoys 11% market share in the
overall mustard oil segment with a dominant 25% market leadership in branded
mustard oil. Natural Resources Pte. Ltd. (KSNR), Singapore is a subsidiary of
the company which is one of Asia's fastest growing agri-focused conglomerates,
with diverse interests in agri-commodity trading, export and import of edible
oils, oil palm plantation cultivations.
It has interests in value added areas like oil mills, logistics, port
facilities and ocean carriers. Some of the brands of the company are Kalash and
Double Sher (Mustard Oil); Kalash Soyabean, Kalash Sunflower, KS Gold Palmolein
(Refined Oils) and KS Gold (Vanaspati). The by-products of the company are
Mustard Cake (De-oiled) and Soy Meal (De-oiled).
Mustard cake obtained from the extraction of mustard oil contains 1-2% of oil.
It is used as a major ingredient of cattle feed in the country. The husk that
remains after the extraction of Soybean flakes contains 50% soy protein and is
used in the preparation of soy meal. This soy meal, rich is protein is a
natural energizer for livestock, poultry and aqua-beings. Apart from generating
the above by-products from the oil-extraction process, K S Oils also helps in
producing bricks. The coal-ash remnants from the plant's boilers are
transported to the local brick kilns to be made into bricks for construction
industry, giving a fillip to the local cottage industry of brick kilns.
India is the fifth largest producer of major oilseeds in the world while the
domestic edible oil market is estimated at USD 15 billion. There has been an
increase in trend of consumer shift towards branded/packaged oil. Branded oil
segment in India is annually growing at the rate of 20%, with sunflowers and
soy oils leading the market. The oil seed deficit in the Indian market with the
ongoing shortage in production together with strong demand growth has made the
government reduce duties on crude edible oils, a process which Fitch believes
is likely to continue.
I believe that the higher duties on refined oils (in the range of
7.3% to 7.75%) relative to crude oil (nil import duties) will continue to
support the margins of edible oil refiners. With a shift in consumption
patterns in India towards the relatively cheaper palm oil, many larger
operators are increasingly shifting their focus towards palm oils.
KS Oils has acquired 53,000 acres of
land for palm oil plantations in Indonesia in addition to the already existing
85,000 acres. The company is going into backward integration and has planned an
expenditure of Rs. 380 crores on the land to develop the plantation over the
next few years. This is the biggest by any Indian company and it also reflects
how futuristic KS Oils is about the oil business and its growing demand among
the Indian consumer. The funding for the acquisition would be done by the
subsidiary firm in Singapore .
There had been a recent Rs. 450 crore equity infusion in the company out of
which Rs. 375 was used for developing palm plantations in Indonesia and the
remaining Rs. 75 crores in the Haldia refinery for increasing the plant
production from 500 to 1,000 metric tonnes per day. All the recent acquisitions
relating to Haldia port for Rs. 125 crores and agri-assets in South East Asia
with an investment of Rs. 2300 million over three years reflects that the
company is ready to meet the expected growth in demand in the future.
The recent purchase of 27 lakh KS Oils shares by Goldman Sachs Investments
Mauritius on the NSE is proof enough of the potential growth Goldman Sachs has
seen in the company. There have been recent allegations on the company relating
to stock price manipulation and insider trading. The stock prices have also
taken a plunge due to this. But we think that a company of KS Oils’ repute and
integrity will not react to these allegations for long.
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the completeness and accuracy. It is not an offer to sell or a solicitation to
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