I studied Gulshan Polyols today. This company is amongst the largest producers 1 of sorbitol and calcium carbonate in India. The interesting thing about the company is its slow-growing-boring-business on one side, and the extreme low valuation on the other.
About 50% of the company's revenue come from sorbitol and 40% from calcium carbonate. The company has a clientele of large corporates 2 including Colgate, Unilever, Asian Paints etc. But the revenue growth has been nominal at 7-15%.
On the valuations side, the company is available at a market capitalization of just 48 crores. There is a cash of 28 crores on the balance sheet, and the last year's net profit was 24 crores. Cash flow from operations for each of the last 5 years has been more than 20 crores. Company has been consistently paying the dividends and I really couldn't dig anything negative about the management (i.e. no subsidiaries, related party transactions, preferential allotments, windmills or insider trading). The company also has 6 plants (in 5 states), 150 acres of land and has a workforce of over 1500 employees. CARE has consistently given a A/A1 rating to the company's borrowings.
Among the large negatives, I could only find the low rate of taxation. Will try to collect more details about it and do some groundwork.
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Both Gulshan Polyols and Kasyap claim to be the largest producers of Sorbitol in India ↩
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Previous post relating to companies with large clients but slow growth. ↩