Just analyse Puneet Resin available at Pe of 4 ,Div Yield of 4%,market cap of 22 crore,Good sales ,selling under their own Brand Vinoprene of rubber chemicals N also distributing products OF American MNC Excel Polymer .
Its been creating new highs.A 2nd generation of entrepreneur has taken over the management n is responsible for turnaround aka Manav Poddar of Mayur Uniqoters.It belongs to long listed Rishiroop group.
Excel Polymers isn’t as commodity a business as it appears, i.e. collection of rubber from trees and selling it. Even though it makes intermediate products and not consumer brands, Elastomers require R&D. They make B2B segment rubber products for medical, transportation, space, consumer, performance additives industry and do command brand name. Similar to making a flavour of ice cream and taste addiction, there is lot of R&D required and IP is valuable for many years.
A very long list of PhD chemists working with Excel Polymers affirms the super specialized nature of Elastomer industry. NP margins of Puneet’s principals are upwards of 10% meaning not bottom of the food chain commodity.
Puneet Resins
It has only a handful of its own specialised polymers like Vulconoil and Vinoprene. Bigger companies have dozens of specialised compounds. It has earned most of its revenue from trading activities of products from its principals. They are expanding production line as per BSE announcement in Jan 2011 to cater to increasing demand. The company has yet to prove itself as a learning, lean and continuously improving organisation to achieve scale and respect in this industry.
Positives are :
Low equity base
No equity dilution
No debt
Promoter increasing stake from open market
Dividend declared in 2010
Chance of increasing offerings from Excel through Puneet
Negatives:
Less liquid market for stock
Link to underlying industry cycles such as auto
Culture of scientific research and innovation has to be maintained to lead
Mainly into trading as yet
Can it be another Mayur uniqouters or Astral Poly? Views invited