Mangalam Organics Ltd produces the following variants of Phenolic Resin:
(i) TERPENE PHENOLIC RESIN DRT-70/90/100 , (ii) ALKYL PHENOLIC RESIN DRT-4001/4002/4015/4007 , and (iii) ALKYL PHENOLIC RESIN DRT-4003/4004.
If this is the result of supply and distribution alliance entered into with DRT, then MOL seems to have started supplying phenolic resins to DRT for distribution in the global markets, though it cannot be validated as the break-up of revenue into product segments is not made available by the company.
The management sounds confident of generating high revenue and profitability from this product line. If all goes well with this product line as envisioned by both MOL and DRT, it may turn out to be an interesting theme to play. At present, MOL’s heavy dependence on camphor(almost 80% of total revenue) is what makes it vulnerable to industry headwinds and cyclicality. China may bounce back any time if the current equation of demand supply gap persists for too long.
Synthetic resins market being tapped by MOL under strategic collaboration with DRT to reach out to global clients across industries may help it reduce dependence on camphor significantly and it may result in rerating of the business manifold. Now it remains to be seen how it all happens over the next couple of quarters.