Valuation and Recommendation
Galaxy Surfactants has shown consistent growth in sales as well as profitability. Personal Care and Home Cleaning are matured markets which explain the muted sales growth of 8% CAGR between FY13-17 however due to economies of scale; EBITDA grew by 22% over the same period. We believe the valuations are fair considering GSL’s strong financial strength in terms of healthy return ratios, free cash flow generation and sound asset turnover ratios. At higher band the issue is offered at 35x 1HFY18 annualised earnings. We like the company’s strong position in its niche area in addition to strong pedigree of management. We recommend investors to subscribe the issue for long term gains.
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About Nirmal Bang
Founded in 1986 by Nirmal Bang, the Nirmal Bang is recognized as one of the largest retail broking houses in India, providing an array of financial products and services. Their retail and institutional clients have access to products such as equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS. The Group is headed by Mr. Dilip Bang and Mr. Kishore Bang.
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