Camlin Fine Science Limited --- Looks interesting but some way to go


(Vishnu Ch) #44

It is actually the same acquisition.
Earlier news was confirmation of a share purchase agreement.
Today’s disclosure is the completion of the said acquisition.


(Ankur Vohra) #45

camlin 4th qtr 2016.pdf (472.0 KB)

Camlin 4th qtr results. Views please.


#46

One needs to look at clarification as well. Very clear that this was operationally a strong quarter. EBITDA margin has expanded due to better capacity utilisation and relentless cost savings. Crude oil benefit was partly offset by revenue decline (a function of crude prices). There were many one offs and removing that I found that FY15 profits were inflated due to tax credits and should have been close to 40cr+ which was still better than 34cr in Fy14. If one removes effect of insurance claim and taxes the FY16 profits would have been close to clean PAT of Fy15. It had to face decline of EUR vs. INR in its European operations. Hopefully all these should be behind us.

Disc: Invested


#47

Good overview of the business and plans

Solid growth drivers in place

  • LatAm acquisition will add over 100cr sales in FY17 and 15cr EBITDA through scale and synergy benefits
  • Expansion of performance and aromatic chemicals will drive margins
  • Globally, blends is big business and Camlin is trying to expand in this high margin segment. Size of opportunity will multiply if they crack it successfully.
  • Sale ramp up of Vanilin will add revenue. There are 2-3 global players and acquiring clients is not that easy despite cost advantage.
  • New chemical compounds being tested and would be launched subsequently
  • Long term growth would come from Dahej plant though it seems delayed as environment clearance is still awaited. Management has indicated to analysts that it could come within a month or so

Disc: Invested


(Kiran K) #48

Camlin Fine Sciences Limited has informed the Exchange that the QIP Committee of the Company at its meeting held on July 05, 2016, approved the issue and allotment of Equity Shares of face value Re. 1 each to eligible qualified institutional buyers at the issue price of Rs 85.40 per Equity Share, aggregating to Rs. 55,67,65,300 (Rupees Fifty Five Crores Sixty Seven Lacs Sixty Five Thousand Three Hundred Only)

https://nseindia.com/corporate/ltr-clarfn2nse05072016_05072016162159_927.zip


(nil_71) #49

Dahej Plant got environmental clearence


(Rajeev M. Parashar) #50

Belgium’s Solvay to develop food-grade antioxidants in India. The company will start production of tertiary butylhydroquinone (TBHQ), which is widely used as food preservative, in the country in July 2016.


#51

Nothing to worry when they compete with them in developed markets, they can do so in the home market as well.


(chintri) #52

#1QWithCNBCTV18
Camlin Fine Q1: Howler
Net Profit Down 78.1%
EBITDA Down 46.1%
EBITDA Margin At 11.3% Vs 23.8%


(Krishna Agrawal) #53

Q4 Fy 16 and now Q1 Fy 17 is also way below expectations. Despite having a tailwind (Chinese plant shut-off). I think it will go down to test 78-80 and will consolidate for next 2-3 months before starting a fresh up move.


(Rajeev M. Parashar) #54

Can somebody please explain why ‘rebate on export sales in CY15’ (Note 3) is under other expenses? I thought the rebate would add to the topline? :confused:

Without the settlement of insurance money (Note 4), would CFS have posted a quarterly (consolidated) loss?

Disclosure: Invested


(Rajeev M. Parashar) #55

Phillip Capital’s view on Q1FY17 Results

Top takeaways from Q1FY17:

  1. Dismal margin performance (missed by 10%) that dragged consolidated PAT to Rs.31mn vs. estimated Rs.116mn. This was largely due to one‐off events/costs at its subsidiaries those we believe would largely be quarter specific.
  2. Standalone (73% of total business) performance was inline with 160bps expansion in EBITDA margin and 18% yoy growth in profits (despite higher tax incidence of 36%).

#56

Don’t know if I am missing something while the stock rallied 25% in a few days. Only thing I find that promoter has subscribed to QIP leading to increase in stake by 1% or so. This has been one of the worst timed investment of mine. Oil was a big issue which is returning back to normal price. Hope it comes out of earnings downturn as well.
Disc: Invested


#57

Came across this very informative interview posted on their site.


(Muser) #58

High debt, volatile free cash flows…doesn’t sound good


(vij) #59

I have seen some analysts and wealth insight magazine classify this as a MOAT. Anyone got any views on CFS being a MOAT?


#60

The biggest advantage these guys have is control over some production process right from RM to finished product and of course high cost competitiveness. They are world leading market share in many products. Moat can only be confirmed in hindsight if it remains sustainable. Volatility comes from many factors like currency, Oil price etc. Other factor is that some clients from blends sector stopped buying from CFS after it started its own blends business. The sales hit was immediate but own sales ramp up is slower than expected as marketing effort matures. There is case to remain optimistic as there is huge scope for anti-oxidants in India as well and there are few players to take advantage of the same.


(vij) #62

Very poor results. Significant decline in both topline and bottomline. I have been trying to build conviction on this company that many people call a moat. This kind of result doesn’t help. Their new plant, when operational, is not going to just roll in profits, there could be bottlenecks, with things being done first time by the company.

I think the whole of FY17 is going to be poor. But next year might see an improvement due to lower base and FY19 would be the inflection point if things go well. Might be good to accumulate after 6 months…


(hrfacebuk) #63

Not a value added comment by any means. But this would test some patience before it starts delivering some decent results.

Discl: Invested and position built at an average price of 91-92 in last 30 days.


(vij) #64

You got in at a good price @hrfacebuk
My concern is if it will hold close to current cmp come April 2017, considering that in all probability it is going to post similar tepid numbers for the next 2 quarters.

Interesting you mentioned both CFS and Apcotex - both these companies, I was thinking of accumulating from next year. I think both are going to be major wealth creators with near term pain.