Couple of stocks have a interesting set up and seem to be bottoming out:
- SH KELKAR
- Domestic leader in the F&F (Flavors & Fragrances) segment
- For the last many years the company has been expanding capacity through organic and inorganic means – they have developed a strong muscle in the Europe and to some extent in the US
- Over the years the Capex were funded through internal accruals and a mountain of debt
- Optically, the company looks down in the dumps (if you just look at PAT) but that’s primarily because of the depreciation and interest payment. The operating profit looks fine…so as the balance sheet deleverages and additional capacity gets utilised, there can be a considerable turnaround.
- World’s top 2 F&F companies are Givaudan and Firmenich, and the latter has a 10% stake in SHK
Disc.: i do not hold SHK shares. I am not a SEBI Certificated professional and this is not a stock recommendation. Please do your own research.
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- 3B BLACKBIO DX
- It’s India’s only listed molecular diagnostics company.
- Promoter recently bought though a small quantity
- With Mcap of 1000 Cr and zero debt and 260 Cr in cash+investments, there is a lot of cushion
- While the company has been doing well (in my opinion) but the stock has taken a hammering. One reason could be because the Operating Margin collapsed in the last quarter because they acquired an EBIDTA negative Belgian company in a fire sale…which is dragging down the margins
- The Belgian company has some specialized offerings in AMR (Anti microbial resistance) testing
- They recently got listed on NSE which was a long awaited thing
Triggers that can play out in the next couple of years:
- Belgian entity turns EBIDTA positive
- The AMR offerings take off
- Entry into the US market (which they say they are trying hard to crack either through acquisition and/or by registering their products for FDA approval)
- They seem to be innovating quite a bit in the Oncology Dx space (e.g.: they launched DPYD test kit last year)
At the current valuations, and given the fortress of a balance sheet, and given the business is doing reasonably well, it looks like a good buying opportunity.
Disc.: a significant part of my portfolio is in this company, so I am naturally biased. I am not a SEBI certificated professional and this is not a stock recommendation. Please do your own research.
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In this Industry, Inventory levels have been very high for most of the Companies including SHK. If the prices come down, it leads to inventory write downs. When the raw material prices rise, it takes a quarter to pass on. The companies in this industry get affected in both the ways. This has been my point of concern. Disclosure No holdings. I am not a sebi-registered advisor. The views are only for academic purposes without any recommendation to buy , hold or sell.
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Reason for Higher Inv Holding - We are witnessing frequent and significant raw material price increases due to geopolitical developments in the Middle East, with current inventory prices going up by upwards of 12% to 13% pretty much across the board. Approximately 40% of our raw materials are directly linked to crude, and another 30% are indirectly linked (such as via freight and logistics). To manage this high volatility, we are maintaining 2 to 3 months of raw material inventory in hand. We commit pricing to our clients based on this stock in hand rather than speculating on future costs, reviewing this process every 2 to 3 months to avoid excess high-cost inventory mismatches. We are fully capable of passing these raw material cost increases on to our customers, and our global accounts have already responded positively, confirming their commitment to our supply with corresponding price increases.
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Sir, I agree with the point of view. However, the data from Screener shows that the inventory levels have always been higher as shown in the sheet.
s h kelkar ratios.pdf (394.0 KB)
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Bodal Chemicals is at an interesting inflection point. Q4 FY2026 showed a strong recovery in both sales and margins.
The Benzene Derivatives business is ramping up from around 20% capacity utilization, with further improvement expected. The anti-dumping duty on TCCA could provide an additional boost. The year-on-year decline in the Dye Intermediates and Dyestuff segments is a concern and could slow the recovery.
On the positive side, government support for the textile sector and multiple FTAs could drive demand for dyes and intermediates. The company has also reduced debt from about ₹900 crore in FY2025 to ₹800 crore, and further deleveraging should improve net profits. At ₹60, the stock is trades at a P/E of 16 and P/B of just 0.6, cheap on book value if the earnings recovery sustains.
Disclosure: Invested. No recent transactions. This is not a buy or sell recommendation.
4 Likes
@ashish.iit – stock has nearly tripled from the 60 levels you mentioned in July on turnaround and now Chinese H-acid supply shock.
Actual FY26 and Q1 FY27 already beat the earlier guidance of ~2,000-2,100 Cr / 70-80 Cr PAT.
With current tailwinds, how sustainable do you see FY27-28 numbers? Is the dye intermediate cycle still early or are we already pricing in a lot of the upside?If below makes sense..forward PE ~15 how do u value this kind of business ?@harsh.beria93
Curious to hear updated takes now that valuations have re-rated.
D-Holding from July and kept adding all the way till today..typical for a click happy bloke 
| Segment |
Q1 FY27 Actual |
FY27 Base Case |
Notes |
| Dye Intermediates |
217 |
890-920 |
Clear H-acid benefit already in Q1 ,will it last Q2,Q3 or longer ? |
| Dyestuff |
149 |
565-585 |
Partial price pass-through |
| Basic Chemicals |
84 |
345-360 |
Supported by sulfur prices |
| Chlor-Alkali |
87 |
355-370 |
Steady |
| Benzene Derivatives |
Low |
210-230 |
Gradual ramp |
| Others |
- |
50-55 |
- |
| Total Revenue |
709 |
2,615-2,670 |
- |
| Expected PAT |
30 |
118-128 |
After interest, dep & tax |
The demand scenario has improved a lot in the last 1 month due to China’s implementation of the Ecological and Environmental Code, and now, trusting the news flow, I believe China has become a net importer of H-Acid. H-Acid prices and dye intermediates have tripled in China, all based on the news flow.
I assume this will affect prices in India as well and consider a price increase here too. The price increase can be passed on to customers with some lag, as dye account for small %age of the total cost for textile industries.
Let’s assume Bodal will have some price locked in due to previous contracts and will not be able to pass on the full price increase due to customer retention and relationships. However, on a blended basis, with spot sales/ new contract, this can push Bodal towards its historical peak margins of 15 to 18%.
Considering all the above, and assuming a demand increment of 20% and a price increment of 20% would lead Bodal to double its EBITDA in q2 compared to q1 ( an optimistic situation, and I am obviously biased).
Disclosure: Invested. No recent transactions. This is not a buy or sell recommendation.
5 Likes
Visaka Industries appears to have turned around in Q4 2026 and shown improvement in Q1 as well. Operating margins moving up and rural economic conditions supporting demand. Building Products revenue is growing at more than 10%. Synthetic Yarn, which remains the laggard segment for the company even that has posted a modest increment. The stock trades below book value, debt going down and the recent capacity expansion is now operational and contributing. The standout long-term driver is ATUM, a patented integrated solar roofing technology, and Visaka is the only ALMM certified (MNRE) supplier of an integrated solar roof product in India. That positions the company uniquely, any government tender that mandates ALMM-listed integrated roofing would effectively have to route through Visaka, giving it a structural edge.
However, the rural demand, which is currently healthy but tied closely to monsoon. The El Nino driven rainfall deficiency could slow rural income growth, with it demand for Visaka’s core roofing and building products. On the stock itself the chart had a breakout around 90, a moved past 100 and the stock is now consolidating around 90.
Disclosure: Invested from lower level. No recent transactions. This is not a buy or sell recommendation.
5 Likes
How do you view the concern about RM imports for the ACS business? There are reports that shipping is being affected from the Black Sea. Also, with the rupee at 94-96 is the asssociated increase being passed on or absorbed?
Visaka sources most of its chrysotile fibre from Russia and now actively diversifying by started sourcing from Brazil and Kazakhstan. Black sea had been effected since 2022, not new.
The company appears to be passing through cost increase as OPM has been climbing each quarter since the September 25, 3.7% to 7 to 11 to 15 likely helped by strong demand.
The company do have a forex committee which monitors forex transactions and frame the hedging policy. Natural hedge is also there as its exports VNext products and synthetic yarn to countries such as Saudi Arabia, UAE, Qatar, Iraq, Iran, Bahrain and Sri Lanka.
The INR has been falling since 2024 and contrary to this in FY25, the company registered forex gain of 1.80 crore. Also raw material cost has been declining is last 2 years from 55% to 52% now.
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