The soap from Karnataka
In this blog, we will cover two topics: the company behind
Karnataka's favorite soap and the concept of the Geographical Indication (GI)
tag.
Karnataka Soaps And Detergents Limited (KSDL) is a Public Limited Company, incorporated on July 09, 1980. It is classified as State Government company.
Mysore Sandal Soap is a brand of soap manufactured by the KSDL. This soap has been manufactured since 1916 when Krishna Raja Wadiyar IV, the King of Mysore set up the Government Soap Factory in Bangalore.
The main motivation for setting up the factory was the excessive sandalwood reserves that the Mysore Kingdom had which could not be exported to Europe because of the First World War. In 1980, KSDL was incorporated as a company by merging the Government Soap Factory with the sandal oil factories at Shivamogga and Mysore.
Mysore Sandal Soap is a brand of soap manufactured by the KSDL. This soap has been manufactured since 1916 when Krishna Raja Wadiyar IV, the King of Mysore set up the Government Soap Factory in Bangalore.
The main motivation for setting up the factory was the excessive sandalwood reserves that the Mysore Kingdom had which could not be exported to Europe because of the First World War. In 1980, KSDL was incorporated as a company by merging the Government Soap Factory with the sandal oil factories at Shivamogga and Mysore.
A Geographical Indication (GI) is a name or sign used on products that have a specific geographical origin, which grants them certain qualities, reputation, or characteristics. These products typically include spirit drinks, foodstuffs, agricultural products, handicrafts, and industrial items. A GI serves as a certification that the product adheres to traditional methods and specific qualities due to its origin.
Only registered authorized users can use the GI tag, which ensures the product's authenticity. Internationally,
GIs are protected under the Paris Convention for the Protection of Industrial Property and the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
In India, the registration of GIs is governed by the Geographical Indications of Goods (Registration and Protection) Act, 1999, effective from September 15, 2003. The first Indian product to receive a GI tag was Darjeeling tea in 2004-05.
KSDL owns a proprietary Geographical indication (GI) tag on the Mysore sandal soap which gives it intellectual property rights to use the brand name, to ensure quality and also prevent piracy and unauthorised use by other manufacturers.
This makes Mysore Sandal Soap the only soap in the world made from 100% pure sandalwood oil.
For the FY 2022-23, the company has sold 27,229.49 metric tons of soaps which generated revenue of INR 10,60,94,00,000 ~ 1060.94 Core. If each soap on an average weighs 75 grams, then 36,30,59,867 soap bars would have been sold during the year.
The company is also engaged in manufacture of detergents, agarbathies, cosmetics and other products which contributed revenue of INR 81.43 Core during the FY 2022-23.
KSDL owns a proprietary Geographical indication (GI) tag on the Mysore sandal soap which gives it intellectual property rights to use the brand name, to ensure quality and also prevent piracy and unauthorised use by other manufacturers.
This makes Mysore Sandal Soap the only soap in the world made from 100% pure sandalwood oil.
For the FY 2022-23, the company has sold 27,229.49 metric tons of soaps which generated revenue of INR 10,60,94,00,000 ~ 1060.94 Core. If each soap on an average weighs 75 grams, then 36,30,59,867 soap bars would have been sold during the year.
The company is also engaged in manufacture of detergents, agarbathies, cosmetics and other products which contributed revenue of INR 81.43 Core during the FY 2022-23.
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| 150g of Mysore Sandal Millennium is priced at INR 805 |
The company is also pursuing premiumisation by offering high-quality soaps at prices accessible to only a select segment of society, thereby creating an exclusive, elite experience for its users.
The company has also exported soaps worth INR 19.62 Crore. This indicates the demand of the soap not being restricted just to the state of Karnataka.
The company reported profit after tax of INR 1,82,49,34,737 for the FY 2022-23. The company declared a final dividend at the rate of 30% on Profit after tax amounting to INR 54,74,80,421 for the year ended 31st March 2023. 100% of the shareholding is held by the Government of Karnataka. Hence, an amount of INR 54.74 Crore [54.74*30%] was credited to the Government of Karnataka’s bank account.
The EPS for the FY 2022-23 is around INR 5,680. Even at a PE ratio of 19, the market price per share would be INR 1,07,920 [5,680*20]. The issued capital of the company is 3,18,221 Equity Shares of INR 1,000 each. At a market price of INR 1,07,920 per share as arrived above the company would be valued at INR 34,34,24,10,320 ~ approx. INR 3,434 Crore [1,07,920*3,18,221].
As on March 31,2023, the company had maintained cash and cash equivalents of INR 90.63 Crore and bank balances other than cash & cash equivalents of 850.09 Crore. The significance of this company is evident from its liquid assets amounting to INR 940 crore.
The company has also exported soaps worth INR 19.62 Crore. This indicates the demand of the soap not being restricted just to the state of Karnataka.
The company reported profit after tax of INR 1,82,49,34,737 for the FY 2022-23. The company declared a final dividend at the rate of 30% on Profit after tax amounting to INR 54,74,80,421 for the year ended 31st March 2023. 100% of the shareholding is held by the Government of Karnataka. Hence, an amount of INR 54.74 Crore [54.74*30%] was credited to the Government of Karnataka’s bank account.
The EPS for the FY 2022-23 is around INR 5,680. Even at a PE ratio of 19, the market price per share would be INR 1,07,920 [5,680*20]. The issued capital of the company is 3,18,221 Equity Shares of INR 1,000 each. At a market price of INR 1,07,920 per share as arrived above the company would be valued at INR 34,34,24,10,320 ~ approx. INR 3,434 Crore [1,07,920*3,18,221].
As on March 31,2023, the company had maintained cash and cash equivalents of INR 90.63 Crore and bank balances other than cash & cash equivalents of 850.09 Crore. The significance of this company is evident from its liquid assets amounting to INR 940 crore.
In addition to this, land records reveal that the company
has capitalized an impressive 99.52 acres of land, excluding leasehold land.
Shockingly, the book value of this freehold land as of March 31, 2023, stood at
a staggering INR 12,19,09,00,000—yes, that's INR 1219.09 crore!
Picture this: if the Government of Karnataka suddenly decides to put the company up for sale, you can bet there would be a queue of private equity investors standing in front of Vidhana Soudha, all eagerly waving their bids in the air.
Conclusion -
Jokes apart, a company having such huge assets, revenue and heritage definitely needs to be safeguarded. If you currently use a premium soap which costs around INR 40 for 75g, consider switching to Mysore Sandal Soap. Renowned for its superior quality and natural ingredients, Mysore Sandal Soap will offer you luxurious and refreshing experience. You won't regret making the switch.
Thank You,
Happy Reading !
Jokes apart, a company having such huge assets, revenue and heritage definitely needs to be safeguarded. If you currently use a premium soap which costs around INR 40 for 75g, consider switching to Mysore Sandal Soap. Renowned for its superior quality and natural ingredients, Mysore Sandal Soap will offer you luxurious and refreshing experience. You won't regret making the switch.
Thank You,
Happy Reading !
Reference -
Price of the soap - Jio Mart
I use Mysore Sandal soap only and feel proud of it.
ReplyDeleteIt feels very happy to read the financials of the the company whose products you already use. Thanks for sharing macha