Empee Distilleries
indexed
BSE: 532920 | NSE: EDL
Empee Distilleries have their presence in TamilNadu and Kerala. They
are making IMFL and the Country liquor. Infact both the states you
have the distribution done by the state government that means what the
manufacturers they make the IMFL and Country liquor and supply it to
the government and in turn they distribute in the entire state mainly
as a revenue generator for the state government.
the company is expanding their presence, they are setting up a grain
based distilleries in Andhra Pradesh plus they are shifting one of
their distilleries, which was operational in TamilNadu in the state of
Karnataka. So the idea is to have the presence in all 4 southern
states and infact because of the entry constraint or there is entry
barrier in the Tamilnadu and Kerela and because of the demand going
up, the same increased demand is distributed amongst the 6
manufacturers because in Tamilnadu there are about 6 manufacturers and
that’s the reason you know infact companies are allowed to have a mix
of Country liquor and IMFL as per their demand which they get from the
market.
Besides distillery business they have about 17 acres of land in
Shreeperumbur, which they are developing and which in an area of about
12 lakh square feet. On that the company is hopeful of generating a
cash revenue of about Rs 150 crore over next two years because the
project is in advanced stage of implementation, the 150 crore cash
flow is likely to come in FY11 and FY12. So if you go by all these
parameters an EPS of 15 -16 is expected of , that means the share is
now ruling at about PE multiple of less than 8 or maybe at about 8 to
9 times. Other similar midcap distilleries companies are ruling at a
PE multiple of 20, while the larger ones are ruling at a PE multiple
of 35 to 40.”
huge upside to Rs 310 per share in a year at PE 20