CMP – 368.9 Market
Cap -377.71 crores
It is an India based company which is engaged in manufacturing of Phthalic Anhydride (PA) and other Industrial chemicals .It business segments include Chemicals and power generation.
It offers its products to various industries such as paper , powder , coating , Agrochemicals ,plasticizers , unsaturated polyster resins ,esters , bakery goods , confectionaries ,feed , food , construction materials
, metal cleaning , electroplating ,water treatment , intermediaries , textile , leather , Flavours and fragrances etc
There has been a decrease in sales in this year due to increased dumping of PA into India at lower prices as there has been a economic recession in rest of the world , especially for CIS countries.
But company has been able to improve its margins through improvement in internal efficiencies, including in Marketing and Working Capital management. Their supply chain improvements also helped addressing the volatility in prices, which in earlier years, have caused huge losses during times of falling prices. Without these improvements, the sharp drop in prices which had an adverse impact on the Industry, would have severely affected them.
Anti-dumping duty.Though there is an existing Anti-dumping Duty against some countries and selected Companies, Producers and Traders in certain countries like Korea, have found loopholes to circumvent it. This continues to be a major reason for the low margin for business. Company is working with govt. to fix these loopholes.
Equity is 1.024 crores
shares of Rs 10 each means 10.24 crores of capital
Promoter holding 41.71%
Long term debt of .28 crore and short term debt is 22.7 crore as of 30th March
2016. Company has Cash and bank balance of 11.3 crore and short term loans and
advances of 4.12 crore.
Year 12 13 14 15 16 Q1(17)
Sales ( in crores) 911.31 1155.91 1050.65 941.69 792.11 219.14
Np (in crores) 4.79 27.75 3.57 14.21 42.73 20.24
EPS (in per share) 4.67 27.1 3.48 13.87 41.73 19.77
Dividend (per share) 0 5 2.5 0 8 6
It is a small Cap company with its business in chemicals which takes its raw materials as crude . As there has been a sharp decline in last year in crude prices , company has able to keep himself stand in the competition and improve margins . They have able to grow through internal accruals .And good times seems ahead of them .
Their fine Chemicals Divisions have performed very well. Their contributions have increased significantly. All these Plants are working at full capacity and substantial expansions through debottlenecking are underway. These will help them increase their earnings and grow up the value chain .These will help them serve customers better and increase market share.
Contribution to the Exchequer is about 15.31% of your Company’s Sales (which is excise + customs) which shows they have paying taxes fully.
Average increase in remuneration is 23% for Employees other than Managerial Personnel & (8.3%) for Managerial Personnel (KMP and Senior Management) which gives some signs of management integrity . Also by reading annual report , I found that management is candid in sharing their bad times which is a positive sign.
It is a available at a reasonable valuation of around 8 PE.Quarter 1 results showing that company has able to bring efficiency which help them to increase earnings with same revenue.
Volatility in crude prices (Raw materials)
Foreign exchange movements as there is lot of import and export involved.
Promoter holding is not high.
Disclosure – Not invested . As i am a novice investor and recently started writing on forum , other senior vp members please let me any other useful insights or feedback on any mistakes .