Vikram Thermo has had a very decent first half for 20-21. It has done Sales & Profits of 36 crs & 8 crs respectively. The Co. is expected to continue the good form going forward. Even if the margins were to correct slightly, it could still end up with Sales of about 70 crs & Profit after tax of 13-14 crs. The current market cap is about 97 crs & appears to be pretty under valued, given its high operating margins & decent return ratios.
These high return rations are despite a current WIP of about 11 crs. The Co. is in the middle of a major expansion of about 20 crs due to be completed by March 2021. The expansion will take care of capacity increase of both its Diphenyl Oxide as well as its Drug coat businesses. In addition, the Co. is setting up a new Carbomer manufacturing plant. So the next couple of years, should be years of growth for the Co. The mgt. is on record to double Sales & Profits in the next 2-3 years as stated by it MD, Mr. Dhiraj Patel in a recent interview.
The high operating margins are also a reflection on the research based nature of the Co.'s operations. Both the Chairman & a Director are PhD’s in Polymer chemistry. The Co. has filed a number of DMF’s with the USFDA as shown in the link below.
A German Co. called Evonik is the market leader in this field. A look at its website would give some indication of the potential in terms of new products.