Shares of an ethanol manufacturing company surged 16.26 percent on Wednesday’s trades to reach an intraday high of ₹ 236.00 apiece on the National Stock Exchange (NSE), as oil marketing companies (OMCs) are declaring additional incentives. At 02:28 PM, its shares were trading at ₹ 230.00 apiece.
Gulshan Polyols is one of the largest manufacturers of Precipitated Calcium Carbonate and Sorbitol in India. It is a market leader with a substantial market share in the respective segments. The company’s distilleries produce grain-based Extra Neutral Alcohol (GENA), country liquor, IMFL as well as ethanol from damaged food grain.
The company informed the exchanges that in view of the current embargo on the release of Surplus Rice by FCI coupled with the increase in the market rate of Damaged Food Grain and Maize, Oil Marketing Companies (OMCs) are declaring an additional incentive amount of ₹ 3.71 per litre on ethanol produced from damaged food grain and ethanol produced from maize with immediate effect.
Therefore, the total incentive amount on damaged food grain will be ₹ 8.46/L and ₹ 9.72/L on maize, including the interim incentive amount given w.e.f. August 07, 2023, for the balance period of ESY 22-23.
In the past three years, the company’s share price has increased by 379 percent to deliver multibagger returns. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares three years ago, the value of their holdings would have been ₹ 4.79 lakhs today.
With a market capitalization of ₹ 1,264 crores, Gulshan Polyols is a small-cap company. It has a low return on equity of 8.01 percent and an ideal debt-to-equity ratio of 0.44. Its shares were trading at a price-to-earnings ratio (P/E) of 32.12, which is almost at par with the industry P/E of 32.01.
The company’s promoters hold a 66.65 percent stake in the company, followed by retail investors with 29.82 percent, mutual funds with 3.52 percent and foreign institutions with 0.01 percent.
Written by Simran Bafna
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