Globus Spirits
Which manufactures and sells industrial alcohol, country liquor and indian made foreign linquor. it has diversified revenue protfolio and its flexibility to shift between raw materials ( molasses and grain) in the production process helped. 30-35% revenue comes from country liquor. it plans to expand its capacities by 73% to 500 lakh bulk litres. project cost is Rs 89.3 crore also includes setting up power generation capacity and modernisation of IMFL bottling plants.
Company Data
In Rs crore fy09 fy10E fy11E
Net sales 197.1 252.4 347.8
EBITDA 26.0 36.6 50.4
Net profit 12.9 22.4 33.2
EPS (Rs) 10.6 11.2 16.6
PE (X) @ Rs 90 8.5 8.0 5.4
PE (X) @ Rs 100 9.4 8.9 6.0
E : estimates
IPO price band Rs 90 to Rs 100
Personal view: regarding valuations, Globus PE works out to 8.9 times its estimated 2009-10 earnings at the upper band, which is expensive as compared to its peers like Tilaknagar. so one should avoid this IPO.
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