What is this information and the source behind it?
Why promoters pledged 4.55% of its holding in Dec '23 quarter? Any info?
Is Archean chemical enjoying these war like situation taking place between Israel and Iran ?
I find this company rather interesting, from a long term perspective. As per the DRHP the Rann of Kutch where Archean leases 6,50,000 acres of land is the second lowest cost source of bromine after the Dead Sea. While even long term contracts will be impacted by spot prices of bromine, the cyclicity should be much lower than that of other chemical companies. Further as this company moves into downstream bromine, the internal source of bromine would give a cost advantage over competition. It’s a nice little long term moat - while 3-4 companies have similar leases on smaller parcels in Gujarat there wouldn’t be too many places in the world which have this kind of advantage - it is a somewhat unique advantage as far as speciality chemicals cos go.
IMO renewal of leases is the long term concern otherwise with 20% + ROCE & 24% net margin in 2023-24 which is like a really poor year in the cycle, the company looks like a long term compounder. 2023 ROCE was 38%+. EvenPE of 24 times (again in a downcycle on low earnings) on CMP of 616 looks quite decent.
Anybody got any insights on SicSim (a subsidary of Neun Infra Private Limited, which is WOS of Archean Chemical and owns 70% SicSim) and its foray into manufacturing semiconductors?(SiCSem plans plant in Odisha, ties up with IIT)
10%+ shares changed hands in the block deal today done at average 658/-. Sellers were India Resurgence Fund and Piramal Natural Resources Pvt Ltd. Buyers included Goldman Sachs and Nistha Investment
Interesting Update
detailed initiating coverage report on Archean chemical by DRChoksey.
DRChoksey_Initiating_Coverage_on_Archean_Chemical_Ltd_with_24%_UPSIDE.pdf (876.4 KB)
next leg of growth will come from bromine derivatives, 50% capex spending is done and benefits will come from FY25.
below is valuation summary
Archean Chemical demonstrated strong resilience in FY24,
maintaining a 35% margin despite revenue and profit growth
moderation. The industrial salt segment’s robust performance
offset declines in bromine revenue. With INR 130-140 crore
already spent on capex, benefits from the bromine derivative
business are expected to materialize starting FY25E. We
project a CAGR of 34% in revenue and 44% in net profit
during FY24-FY26E, driven by volume recovery and new
product lines. Valuing the stock at a P/E multiple of 17.5x
on FY26E EPS, we recommend a BUY with a target price of
INR 943.
Interesting developments - https://www.bseindia.com/stockinfo/AnnPdfOpen.aspx?Pname=408b5c18-65f9-40be-8b57-3e80ad57cc4d.pdf
This seems to make sense - previous collobration with IIT - diligence + research?
From what I can understand, their bromine derivative products has some key usecase and they are making investments which align with renewable/ev sector and uses their bromine deratives. Offgrid is a pre-revenue company.
Wondering how this will play out.
Disc- Invested
Thanks for sharing, It shows management intention to go for new industry uses of their products in Battery storage and semiconductor manufacturing, investment is for 20% stake.
ACI_27102024085050_SEIntimation.pdf (1004.5 KB)
In ACIs Bromine business, who are domestic competitors?
In latest concall, one analyst ask the question of increase capacity by competitors in next 2-3 years. Neogen chemicals is there competitor or their client? Anyone here knows about it ?
Not many listed players in the bromine space that are competing with ACI. Yes, Neogen is one of their competitors. The silver lining with all its competitors is, Bromine production is correlated to Brine field availability, which is quite limited, and ACI has a huge advantage as it has its own reservoirs which is very cost effective. ACI has a huge land parcel which is very rich in brine, and a lot closer to the ports. Again cost effective. Neogen does not have any such brine fields, and currently they’re running in different circles as their priority right now is to focus on the battery chemistry. It seems as if Neogen could be one of ACI’s clients, as they use bromine to create organic compounds.
management is continuously investing in new companies of battery, Semiconductors , start up to increase the usage of Bromine products, they are trying to expand the market with tie up and investments, this approach is appreciable