Bse Code: 506579
- M/cap:116 crs
- B/v: Rs 112 as on 31/03/2011
- EPS:Rs. 36.30 as on 31/03/2011
- Promoter Share holding(%):56.13
JUNE 11 RESULTS ATTACHED
- OCCL a company belonging to the Duncan JP Goenka group of companies, traces its origin to 1978 when it was incorporated as Dharuhera Chemicals Limited (DCL). In 1994 OCCL set up a unit for manufacturing of Insoluble sulfur which later emerged as the star product of the group.
- Insoluble sulfur units is situated at Dharuhera (Haryana).
- Insoluble sulfur is marketed as “Diamond Sulf” in India and around the world.
- It adheres to total Quality norms and is ISO 9001-2000 & EMS14001-2004 Certified.
- OCCL produces wide range of insoluble sulfur grades (Including Pre-dispersed &
- It has installed capacity of 14,400 tonnes and Plant is running at full capacity.
- It is being widely exported to leading tyre companies around the world.
- OCCL’s efforts in exports have earned Government of India’s recognition as certified “Star Export House”.
- One of OCCL’s unit in Dharuhera as a designated Export Oriented Unit.
- More than 80 % of the company s turnover is derived from insoluble sulpher.
- The Company manufactures both Commercial Grade and Battery Grade Sulphuric Acid and Oleums.
- Sulphuric Acid finds application as a dehydrating agent,catalyst,active reactant in chemical processes,solvent and absorbent.
- It is used in the Petroleum,Paint,Rayon,Textile,Dyes,Fertilizers,detergent powder and cake.
- H2SO4 is produced by the steam generation process used in insoluble sulphur. So it is essentially a by product that is sold in the market.
- INSOLUBLE SULFUR:
The de-bottlenecking exercise was done by the company there by increasing the insoluble sulphur from 10703 tonnes to 14400 tonnes.
The company has started work on a 11000 tonnes Insoluble Sulpher Plant in a SEZ at Mundra,Kutch,Gujarat in two phases.
The first Phase of 5500 MT has been commissioned in August, 2011
- Largest producer of insoluble sulphur domestically and second largest internationally.
- The margins are improving on a YOY basis
- 100% expansion in production
- Commands pricing.
- 80 % of the company sale comes from insoluble sulphur.
- Exports constituted 70% of the total insoluble sulphur (by value) sales in 2010
- The low dividend payout ratio.
- Growth in radial tyre industry will result to a growth in insoluble sulphur industry.
- If the economy revives fully than there will a shortage in insoluble sulphur supply domestically and internationally so this gives further opportunity to expand its production.
- Insoluble sulphur is a seller market.
- The trend in value added insoluble sulphur like HS and HD continues so through Continuous R&D the company will be able to keep the quality edge and gain more acceptance from the global tyre company and compete better with China.
- Planning expansion to new markets.
- Global recession can be painful for the company
- Any fluctuation in the Petrol prices will impact the raw material prices as most of its raw material are petroleum based.
- Addition of capacities by Chinese producer.
- Increase in usage of reclaimed rubber could hamper the growth of the industry.
- Risk of adverse exchange rate.
- The prices of the sulfuric acid is decided by the one dominant supplier for whom the sulfuric acid is a by product so will be a threat and the demand for Sulfuric acid will be subdued for some years.
- The concept of reclaimed rubber will reduce the demand in the replacement market
Conclusion: At current price the stock looks cheap