Oriental Carbon and Chemicals Ltd

(S_Banerjee) #352

(Pratik Chandak) #353

Should offer the buyback above Rs.1200…
Also, note that, management and institutions has increased their stakes in the equity capital…


Looks like management is confident of the busienss…

(shikhar mundra) #354

great set of results
-Total Income up 31% to Rs. 99.6 crores as compared to Rs. 76.1 crores in Q1FY18 lead by a mix of increase in quantity and price.
-EBITDA up 32% to Rs. 31.6 crores as compared to Rs. 24.0 crores in Q1 FY18.
-Profit after Tax up 42% at Rs. 11.7 crores with Margins of 17.7%

company declares and interim divindend of 4 per equity share.
Company declares a buy back of 35 cr at a rate of Rs.1150 per equity share.

“Continuing with our Company’s philosophy of rewarding the Shareholders, the Board of Directors have approved the share Buy Back programme of Rs. 35 crores at a maximum price of Rs. 1150 per share. This will in no way hamper the growth/diversification plans of the Company and the Company will continue to pursue growth and expand its business in the coming years with the help of a strong Balance Sheet.”

(S_Banerjee) #356

Subsidiary company Duncan Engg. doing good and reported fair enough Q2 numbers.

(Pratik Chandak) #357

Can anyone tell me where can I check the sulphur rates (Used in production of insoluble sulphur)?
What are the current rates and past trend?


What does this implies?
Does this means that IS used in tire manifacturing is 1.4 time more that rubber?

(Pratik Chandak) #358

Management hinted in their concall that they may comeup with further expansion plan and also, may diversify their business by acquisition route through NCLT. (Also, buyback offer suggests confidence.)

(shikhar mundra) #359

they said they were looking at bidding for a company through NCLT route, but that has got dropped.

(Santoshmk) #360

(S_Banerjee) #361

Update on Buyback offer


(S_Banerjee) #363

Daily Buyback


(Saji John) #364

Reported good set of numbers with improved margins. Utilized 56% of 3.5 cr buy back. Paid up capital down to 1017.78 lks from 1031.13 lks. https://www.bseindia.com/xml-data/corpfiling/AttachLive/8897c1aa-9d29-4208-b947-805eb477151a.pdf

(S_Banerjee) #365

Impressive show by Duncan group promoters.

(Pratik Chandak) #366

Continuous EBIDTA margin expansion…
This company is unbelievable… EBIDTA Margins are highest since I am tracking this company and the trend is always increasing… people say it is commodity based company… but its financials never experience such a cycle to great extent… They just keep improving and keep expanding… I beleive with such a high growth and high margins and stability, company should trade 25x its EPS (Historically, highest it has traded at 28).

p.s. I have invested at price of 900 and holding as of now…

(Pratik Chandak) #367

Q3FY19 Concall Highlight:

• Started the production of Phase 2 expansion for Insoluble sulfur as planned.
• New trend in automobile industry supported the higher quality of tire driving the domestic demand for insoluble sulfur.
• Radialisation in new truck segment stands at 70% in new trucks OEM and 40% in replacement market. This helped to higher volume growth. In addition, antidumping duty for China helped domestic market growth.
• Capacity has increased to 34000 now along with increase in capacity utilization.
• Current earnings in Q3FY19 include Rs.3 crore MTM gain on currency against loss of Rs.3 crore in Q2FY19. For 9 month, MTM number is not big.
• Realization in international market has remained more or less same.
• Management is not expecting much growth in prices of insoluble sulfur in dollar and euro terms. Currency fluctuation is expected to drive the realization.
• On the other hand, realization for Sulfuric acid was on the higher side which helped improve margins.
• Capacity utilization of phase-II is not optimal but management was expecting it to be optimally utilized by FY20 which will drive the growth.
• Management is mulling on the expansion plan and working towards approval in May 2019.
• Management has given the EBIDTA margin in late 20s.
• Management commented that depreciation, interest and deferred tax has peaked out and expect it to reduce in future.
• Subsidiary Duncun Engineering Ltd has seen a turnaround for the quarter which also included few one-off and management is expecting things to improve here onward.
• Management is targeting addition of one line every 2 years.
• Commenting about USA market, management commented that USA is very matured market and they are making inroads and trials are going on. All the ground work should pay off from next calendar year.
• Slowdown in tire demand has not been felt by OCCL reasoning the possibility of lag effect. But this slowdown in tire demand is expected to substitute by increase in Radialisation.
• Company has very small market share in China. So, slowdown in China won’t affect much to the company.
• Globally, capacity utilization stands at 85%.
• Management expects the global IS demand to grow at 3.5% CAGR while Domestic IS demand to grow in double digit CAGR for next 2 to 3 year

(Saji John) #368

I am quoting the icicidirect report “It operates in a closely guarded technology space with
small industry size (~| 3500 crore) and low asset turnovers (~1x). This
limit the competition in the marketplace. Therefore, given the impressive
utilisation of the expanded capacity, the next leg of capex is on the anvil
for OCCL. However, with low asset turns (~1x) and B2B nature of
business profile, we expect limited scope RoCE expansion from the
current levels, which will limit the valuation multiple expansion, going
forward. From a fundamental perspective OCCL remains a steady
business model wherein asset turnover is ~1x, EBITDA margins is ~30%
and net working capital cycle is ~75 days with consequent RoCE at
~20%. Going forward, over FY18-20E, expect sales, PAT to grow at a
CAGR of 12.3%, 19.7%, respectively, wherein we build in 230 bps
expansion in EBITDA margins to 32.2% in FY20E” Since the major tyre manufacturers are expanding capacity and it has high entry barriers, at best it can be a steady compounder right? In this market that is probably the space to be in.
Discl: I am invested in OCCL

(manivannan.g) #369