Gandhar Oil Refinery India IPO

Leading Market Share: Company was India’s largest manufacturer of white oils by revenue in FY 2023, and one of the top five players globally in terms of market share in the calendar year 2022. Their revenue from operations grew at a CAGR of 40.59% to Rs. 4079.4 Cr in the FY 2023.

Diverse Customer Base: They cater to an extensive customer base of more than 3,500 Indian and global companies. Their customers in the PHPO division include P&G, Unilever, Marico, Emami, Bajaj Consumer Care, Encube, Patanjali, Dabur, Amrutanjan Healthcare, Supreme Petrochem and other leading Indian pharmaceutical manufacturers. They manufacture lubricant oils for Gulf Oil, Adani Ports etc. PIO division include Toshiba Transmission and Distribution Systems (India) and other leading manufacturers of transformers and power distribution and transmission companies.

Scalable Business Model: Gandhar Oil Refinery has over three decades of experience in the specialty oils industry. They have increased the scale of operations over the years, while increasing efficiency and reducing costs. The business has high entry barriers due to complexities in technology, regulatory norms and hazard management.

Consistent Financial Performance: The company has demonstrated consistent financial performance among peers in terms of revenue, profitability and efficient capital employment. revenue from operations grew at a CAGR of 40.59% between FY 2023 and FY 2021. PAT has also increased significantly to record a CAGR of 15.02% in the same period. The ROE and ROCE are among highest in peer group.

Strategically Located Manufacturing Facilities: Company operates three manufacturing facilities, with two plants located in Western India and one in Sharjah, UAE near the ports which saves time and cost towards transportation.

Supply Chain Risk: They source a majority of raw material, base oil, from suppliers in South Korea and the GCC Region, Delays, interruptions or reduction in the supply of raw materials due to geo-political reasons is akey risk.

Exchange Rate Risk: Exchange rate fluctuations in various currencies in which they do business, mainly USD and other currencies, could negatively impact business and finances.

Capital Intensive Business: They have significant working capital requirements for manufacturing operations. If they experience insufficient cash flows to fund working capital requirements or are not able to provide collateral, there may be an adverse effect on business.

Legal Proceedings: There are pending litigations against the company, certain subsidiaries, group companies and certain Promoters and Directors. Any adverse decision in such proceedings may adversely affect the business.