V good results posted by Manali since last 2 quarters in-spite of rising crude.
One reason could be rise in prices of Polyol ? Is somebody tracks the price can highlight the same.
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Manali Petrochemicals Posted good results in Q1 FY19
This is huge
Finally after quite sometime, something good happening! The PG expansion decision was good as they are able to generate better realisation. They are also only domestic manufacturer of Polyols but they are not able to generate good realisation in Polyyols which they are in PG. The amount is also reasonable - since cash is lying in the books - this will be apt use of the funds and no additional debt on the books.
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Precicely. This is a big and bold step and the stock and get significantly re-rated when market conditions improve. I think it is also likely to be a major beneficiary of the multi-cap rebalancing with such an expansion in the pipeline
Dos anyoe here have clarity on the propelyne glycol and polyol market dynamics? What is the demand supply situation in the medium to long term
Great results. PAT almost doubles YoY and is more than six times QoQ.
Higher margins (probably due to the lower crude prices), coupled with the expansion plans in PG should be good rerating triggers. The stock had already run up quite a bit before the results but now looks fairly valued / undervalued again with the good results.
A sub-10 PE (consolidated), almost no debt, improving margins and incremental capacity addition. Add to that any incremental import substitution measures of GoI, plus the PLI scheme. Good times ahead.
Unbelievable results! Manali Petro. Topline 100% up and Bottomline - 10x up!
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WOW!
Big mistake to exit before results on the run up. Will likely have to pay a heafty premium to buy it back
Just saw a report on CNBC that the prices of polypropylene and polyethylene have increased significantly and is likely to stay elevated in the near term. Does this impact Manali from a raw material point of view for production of propylene oxide and propylene glocol? I am not able to find the process chemistry of Manali in the Annual Reports
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http://tradearabia.com/touch/article/OGN/379048
It seems the prices are likely to remain elevated owing to storm in US.
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Useful article, thanks. So the prices of propylene oxide and propylene glucol have increased as well along with polypropylene in the US. Not sure what the net impact of this is for Manali.
Firstly, do they use polypropylene as a raw material? If yes, then is the price increase passed on proportionately or is it even higher for the end consumers. Does anyone know these details?
@Amit_Doshi the article doesnât have a date. How recent is this?
If the prices remain elevated for a couple of more quarters, Manali may land up making profits equal to a third of its present market cap in 2021 itself. If we can answer this with certainty we may be sitting on a multibagger in a year.
This should be recent article as there was a storm in US recently and hence should be relevant. Regarding the certainty of this - I dont think even management will tell you that. So a tough one to guess that.
The article was published two weeks back so the shutdowns seem well and truly in place for a while. I tried digging to find out where MP get their polypropylene from but couldnât find the source and so canât pinpoint the impact that its price inreases will have on MPâs raw material costs, sales prices and margins. But going by last quarters results it seems safe to assume that the margins will be elevated.
Can some help explain what the rm is . Given that crude is also going up ⌠how will margins change . And whatâs a good source to track prices of glycol and other products of theirs
Despite back to back outstanding quarter results, rerating of this stock doesnât seem to be on the cards? Trading at a ridiculously low PE of < 6. Can someone shed light on why this stock continues to be so undervalued? Especially when the Nifty and Sensex keep hitting record highs and every other stock seems to be highly overvalued in this market?
Hi @AJain, while there is no way of definitively knowing why a stock may remain undervalued, but in all likelyhood this price action indicates that the market believes that the earnings seen over the past few quarters are not sustainable. Manali petrochem at the end of the day is a cyclical play and soaring prices of propylene glycol has led them to post bumper results recently. The market probably believes that the best / peak earnings are done, and so a stock price peak may have also already come.
Disclosure: Had sold out cmompletely after the previous quarter results at 86.
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I continue to hold Manali considering the low P/E and fuel prices still running quite high. It will reap in a few more quarters of record profits and the downside risk is very limited in case of an anticipated market correction
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Looks like this is reason for huge raise in profit posted:
Page: 16
Post pandemic, exporters to India shifted their
focus to the more lucrative developed markets
and the global movement and logistics issues
further restricted import of polyols and PG into
India. In sum, the Indian market witnessed supplies
falling short of demand and the prices peaked to
unprecedented levels. Though the input costs also
increased, the domestic players could reap better
benefits, which was being denied to them in the
past due to unrestricted imports through FTAs
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