Ravikumar Distilleries Ltd. (RKDL) IPO Price Band 56 ... - PARASRAM

Peerset Comparison
` Crore (FY 10) RKDL** Empee Distillery Globus Spirit
FY 10 Total Sales 50.23 874.36 385.5
FY 10 PAT 1.99 15.41 28.92
Equity 24 19.01 19.76
Face Value 10 10 10
EPS 0.83 8.11 14.64
CMP 64 123 180
PE 77.19 15.17 12.30
Market Cap 154 234 356
M Cap/Sales 3.06 0.27 0.92
PAT (%) 3.96 1.76 7.50
** RKDL Equity Post IPO
Risks
Alcohol & Related industries are under strict Govt control.
The industry is among the highly taxed, it is cash cow for many states with weak financial condition. With rising
competition, higher taxes compress margins.
It is a state subject and different states have their own regulations, any player that plans pan India operations has to deal
with 28 different rules.
The industry has negative social image. In some states like Gujarat, Mizoram etc. there is complete ban on alcoholic
beverages.
The size of RKDL is too small, with rising competition from domestic & Foreign players, it may find it very hard to
expand.
The issue looks over-priced given its bigger peers are at more attractive valuations.
CARE has given the Issue low “2/5” Ratings for Poor Fundamentals.
Valuation & Recommendation: Highly Risky
RKDL is a small IMFL maker based in Tamil Nadu. The IPO Pricing looks steep, given better valuations of Peers and CARE’s
low grading. It looks to be an effort to make hay of the excitement in Primary market. The issue is highly risky.
For Internal Private Circulation Only
Disclaimer: The information provided in the document is from publicly available data and other sources, which we believe are
reliable. It also includes analysis and views expressed by our research team. The report is purely for information purposes and
does not construe to be investment recommendation/advice. Investors should not solely rely on the information contained in this
document and must make investment decisions based on their own investment objectives, risk profile and financial position.
Efforts are made to try and ensure accuracy of data however, Shri Parasram Holdings Pvt. Ltd. and/or any of its affiliates and/or
employees shall not be liable for loss or damage that may arise from any error in this document. This document is not for public
distribution and should not be reproduced or redistributed without prior permission.