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Wednesday, October 07, 2009

KS Oils surges on land acquisition in Indonesia

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KS Oils rose 1.69% to Rs 69.10 at 12:10 IST after the firm acquired an additional 53,000 acres for developing palm oil plantations in Indonesia through its wholly-owned Singapore subsidiary, K S Natural Resources Pte.

The announcement was made during trading hours today, 07 October 2009.

Meanwhile, the BSE Sensex was up 104.10 points, or 0.61%, to 17062.82.

On BSE, 7.25 lakh shares were traded in the counter as against an average daily volume of 13.50 lakh shares in the past one quarter.

The stock hit a high of Rs 70.25 and a low of Rs 68.55 so far during the day. The stock had hit a 52-week high of Rs 70.90 on 30 September 2009 and a 52-week low of Rs 30 on 27 October 2008.

The stock had outperformed the market over the past one month till 6 October 2009, rising 17.97% as compared to the Sensex 8.09% rise. It outperformed the market in past one quarter, soaring 22.99% as against 20.76% rise in the Sensex.

The mid-cap edible oil maker has an equity capital of Rs 36.87 crore. Face value per share is Rs 1.

The current price of Rs 69.10 discounts the company's Q1 June 2009 annualised EPS of Rs 5.52, by a PE multiple of 12.51.

The latest land acquisition gives K S Natural Resources Pte (KSNR) a total of 138,000 acres that should yield 215,000 tonnes of crude palm oil which is about 4% of India's total palm oil requirement and 60% of KS Oils' own requirement.

The funding for this project will be done through internal accruals and debt at the subsidiary level. The total funds required for the new project would be about Rs 380 crore over the next three years.

The acquisition of land in Indonesia, according to reports, is in line with K S Oil's strategy of becoming an integrated edible oil player in South Asia and a leading FMCG player in India. Palm oil is the most consumed edible oil in India.

On 18 September 2009, Goldman Sachs Investments Mauritius bought 56 lakh shares, or 1.51% equity of the company at Rs 58.75 each. Later on 22 September 2009, Goldman Sachs bought additional 40 lakh shares at Rs 62 each on the BSE. Both the transactions were through open market purchases.

On 4 June 2009, Citigroup Venture Capital International Growth Partnership Mauritius (CitiVen) had sold 30 lakh shares, or 0.84% equity of KS Oils at Rs 62.23 per share through a block deal on the BSE. On 3 June 2009, CitiVen had sold Rs 32 lakh shares of K S Oils at Rs 60.35 each. On 28 May 2009, CitiVen had offloaded 80 lakh shares of of K S Oils at Rs 54.33 each.

CitiVen holds 5.81% stake or 2.07 crore shares in K S Oils. (As on June 2009).

KS Oils' net profit rose 20% to Rs 49.21 crore on a 30.8% increase in sales to Rs 906.04 crore in Q1 June 2009 over Q1 June 2008.

KS Oils is a leading edible oil company with 7% market share in the mustard oil segment and a 25% share in the branded mustard oil segment.

Promoters have pledged 3.93 crore shares or 11.05% stake of the company. Total promoter shareholding in the company is 38.23% (as on 30 June 2009).