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Friday, July 8, 2011

Rushil Decor Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,views and outlook,multibagger

Scripscan:Rushil Decor Ltd

Story:Rushil Decor Limited (RDL) is a part of the Ahmedabad based Rushil group engaged in the manufacturing and sales of laminated sheets. The company was promoted by Mr. Ghanshyambhai Thakkar in 1993 as a private limited company. In 2005, the promoters merged other group companies namely Mica Rushil Private Limited and Rushil High Pressure Laminates Private Limited which were in the same line of business. In 2007, RDL was converted into a public limited company and its name was changed to Rushil D├ęcor Limited. RDL started as a manufacturer of laminated sheets with an installed capacity of 8.4 lakh sheets per annum which has increased to 30 lakh sheets per annum as on date. In 2009, RDL diversified into the manufacturing of Plain Particle Board in Gujarat with installed capacity of 13.76 lakh square meters.Currently the company is setting up a MDF unit at Chikmanglur, Karnataka.Rushil Decor manufactures decorative laminate sheets under the brand ‘Vir Laminate’ at its 3 manufacturing facilities in Gujarat.Since the company’s key raw materials include petrol based products such as phenol, methanol and melamine, it is subject to profit fluctuations as input prices vary.The demand for the company’s products are likely to increase led by growth in Real Estate and furniture industry, however the Laminate Sheet, PP Board and MDF Board market is highly competitive and fragmented.The company venturing in a new geographic market of Karnataka with previous experience only in Gujarat will also face potential challenges. Although it has been sanctioned a term loan of Rs. 44 crore for the proposed project by Bank of Baroda, no working capital facilities / funding for the proposed project have been arranged. Besides, company has failed to maintain proper records of inventory in the case of process stock for the period 2006-07 to 2009-10.The company at present prices is quoting over 20 times its forward fy12 earnings.Comparable peer century ply with much bigger size and better management is quoting at less than 10 PE.I assign a fair value of 50rs for rushil decor.Its a " BLIND SELL" at present levels.

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