New brand penetration initiatives pay off; gains a larger market share in Eastern India
Quarter highlights
- Turnover up 120% Rs. 1288.56 crore
- Net profit up 109% at Rs. 20.22 crore
Gokul Refoils & Solvent Limited (GRSL), one of India's leading edible oil companies in the FMCG sector continued its profitable growth with a record turnover in the second quarter of FY 2010-11. The company posted a 120 per cent rise in turnover at Rs.1288.56 crore for the second quarter ended September 30, 2010. Net profit grew 109 per cent to Rs. 20.22 crore for the quarter ended September 30, 2010 as compared Rs. 9.68 crore in the corresponding period of the previous financial year. The company’s PAT was reported at Rs. 42.95crore in the audited results.
Half- Yearly Performance
For the six months period ended September 30, 2010 the net sales of the company grew 97.1 % to Rs 2162.73 crore compared to Rs 1097.10 in the previous corresponding half year. Net profit during this period grew by 90.1% at Rs 30.28 crore as compared to Rs 16.16 crore in the corresponding period last year.
New Initiatives
Marketing
GRSL has increased its focus on brand building and establishing a strong network of C&F agents, distributors and retailers in existing markets to capture market share from the unorganized players. The company has chalked out plans to increase its retail channels through tie-ups with major supermarket chains and to increase brand visibility through advertising activities like TV commercial, outdoor advertising, advertisements in print media and sponsorship in festive events like Navratri, Dashara and Deepawali etc. To this end, it has earmarked a Sales and Advertisement expenditure budget of Rs 15 crore to be spent up to FY12.
During the quarter, GRSL has strengthened its presence in North East, West Bengal, Bihar, Jharkhand, Orissa, Maharashtra, Uttar Pradesh, Uttaranchal, Madhya Pradesh, Delhi, Punjab & Haryana, Himachal Pradesh, J&K, Rajasthan and Gujarat. Including the 210 distributors added during the quarter, the company has strengthened its distribution system all over India with 46 C&F agents and depot, 610 distributors and more than 150000 retailers.
Further, the company has already started its packaging facility at Mumbai to establish its presence in the region before setting up a manufacturing plant at Maharashtra.
Capacity expansion
As a part of expanding its total capacity from 19, 14,000 MT to 23, 64,000 MT during FY 11, GRSL has expanded its castor seed processing capacity by 700 TPD, castor extraction capacity by 400 TPD and castor refining capacity by 200 TPD during this quarter. The total operational expanded capacity of 23, 04,000 MT will be enhanced up to 23, 64,000 MT with the setting up of 200 TPD Kachi Ghani ultra modern Chillex plant at Sidhpur.
The company has already installed a 1,100 TPD refinery at their Haldia facility last year which is running on optimum capacity during second quarter, resulted in gains a larger market share in Eastern India.
The company’s long-term plans are to set up port based refineries at Maharashtra and South India and enter in new markets like Andhra Pradesh, Karnataka and Goa.
Revenue and Earning Guidance
Going forward the company expects a significant improvement in its revenue and margins from the following factors:
- Better price realization from company’s marketing and branding initiatives and an increase in contribution from packed oil sales
- Haldia plant to result in two fold advantage of cost savings due to closeness to the port and proximity to Indonesia/Malaysia with additional significant benefits of sales tax exemption.
- Optimum Capacity utilization of newly operational capacities
Management Comment
Commenting on the financial performance, Mr. Praveen Khandelwal, VP, Corporate Strategy, GRSL, said, “Our performance reflects our commitment towards providing high-quality and healthy edible oil to consumers. The growth shown by the company is a testimony to the fact that our retail led brand strategy is bearing fruit and our marketing initiatives are paying off. With the increased installed capacities and newer capacities to come in the near future, GRSL is very well positioned to reap in benefits of the increasing edible oil industry in India and globally.”
About Gokul Refoils & Solvents Ltd (BSE code: 532980, NSE: GOKUL)
Gokul Refoils and Solvent Limited (GRSL) is one of India’s leading FMCG Companies with international presence, dealing in edible oils such as Soya bean oil, Cottonseed oil, Palm oil (Palmolein), Mustard oil, Vanaspati and Industrial oils such as Castor Oil. It is an ISO 22000:2005 Certified Company with a wide customer base spread globally. The company has set up offices in Singapore and Mauritius to facilitate its international trading operations and has an extensive marketing and distribution network for its popular brands “Gokul” and “Zaika” across 20 states in India. With a loyal customer base in various countries across continents, GRSL supplies products to United States, South Korea, European Union, China, Singapore, Indonesia, Malaysia and Vietnam. The company owns four production plants equipped with latest equipment and technology in the states of Gujarat and West Bengal in India.
Forward Looking Statements
This press release contains forward –looking statements, which may be identified by their use of words like ‘plans’, ‘expects’, ‘will’, ‘anticipates’, ‘believes’, ‘intends’, ‘projects’,’ estimates’ or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the company’s strategy for growth, market position, expenditures, and financial results, are forward –looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The company’s actual results, performance or achievements could thus differ materially from those projected in any such forward - looking statements. The company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or event
