Valiant Organics - High ROCE, debt free

(Manoj Agarwal) #144

(vinay_new07) #145

Any reason for such a sudden massive rally?

(Ghanisht Nagpal) #146

sino-US trade war has given massive tailwinds to chemical sector, valiant is in position to exploit this as 50%+ is export oriented.

(Balusu Aditya) #147

Do you reckon the same is the reason for the rally in NGL Fine Chem?

(AmitContrarian) #148

What will be the total Capex planned now with merged entity ? Stock ran up not just bcoz of trade war etc, These are speculative guess.

(TT) #149

Yeah i think it’s speculative too. Once the mood turns, it’ll go back to it’s usual range.

(Raj) #150

That exactly my thinking too… nevertheless growth plans look good. I will reenter once it cools down

(phreak) #151

I don’t think its all just speculative. Organic Chemicals exports are on a tear with latest quarter showing 84% growth.[0]=0&commodity=132&startDate=2000-04-01&endDate=2018-08-01&currency=inr&consolidation=month

Most recent month in fact has had 96% growth driven by more than double volumes. This looks to be the start of a real mega trend with or without trade war.

Looking forward to the half-yearly numbers in Oct.

(AmitContrarian) #152

Capacity has to be ready to sell more, They were already running at full capacity. The capex happening at moderate peace, they never planned to expand capacity 5x in a year.

(Raj A A) #153

EC received for enhancing the mfg capacity from 400 MT to 1800 MT. Confident of achieving 30 to 35% more production for FY 19

(Ghanisht Nagpal) #154

Very good news for VOL

(Raj A A) #155

Valiant RM is phenol. In this case firming up of RM cost would squeeze its margins. Can u pls throw some light on this aspect?

(phreak) #156

I had speculated on the possible synergies of Amarjyot acquisition in this post. Today I stumbled upon another company in this space named Chirag Organics. I was checking products on their website and found everything from Chloro Benzenes, Chloro Phenols, 3,4 DCNB, OCPNA listed in their products - This is essentially Valiant’s RMs and end products as well as Amarjyot’s RMs and end-products.

So this acquisition has precedence and synergies and also seems to validate my organic chemistry speculation. This means a significant backwards and forwards integration as well as common RM (Benzene) which would mean good bargaining power and better logistics and integration.

Disc: Invested

(Ghanisht Nagpal) #157

If we tally RM graphs with VOL then we can observe that VOL passes on RM cost increases. The scenario is that RM is rising because of demand for VOL products aswell, from what I believe VOL like other high value manufacturers works on spread basis and not fixed cost basis. So it’s safe to believe costs are being passed on with VOL’s spread aswell. You would be correct in the case if RM was high in demand but VOL’s products were not. Here both are in short supply.

(Multiplier777) #158

Since Amarjot had a pat of Rs 13 cr in FY2017 and assuming a 20% growth each year of FY2018 and FY2019, PAT assumed at Rs 18.7 cr for FY2019.

Valiant had a PAT of Rs 16 cr in FY2018. Assuming a growth of 30%, PAT assumed for FY2019 is Rs 20.8 cr.

Total PAT for Amarjot and Valiant will be Rs 39.5 cr in FY2019.

Post merger of Amarjot with Valiant, the equity will expand to 1.398 crore equity shares. Thus based on existing market price of Valiant of Rs 1142/share, market cap will be Rs 1596 cr.

Thus, post merger of Amarjot, is Valiant trading at 40.4x forward PE FY2019.

Am I going wrong somewhere? Have assumed optimistic PAT growth numbers.

(sushildarveshi) #159

anyone attended Valiant presentation at SME stars event held at BSE ?
If somebody attended, can they share the notes if possible.
presentation is not on their website.

(sushildarveshi) #160

Attached is the presentation at sme stars event

Valiant Organics Ltd.pdf (1.7 MB)

(nirajshah85) #161

You can read the whole article here - Amarjyot-Valiant Organics: Consolidation to Grow

(Ghanisht Nagpal) #162

Results declared. Truly superb performance.

(phreak) #163

Numbers look good. Abhilasha Texchem numbers are included for H1 FY17 so the numbers are comparable.