Upload
phungnhi
View
225
Download
2
Embed Size (px)
Citation preview
Investment IdeaInvestment IdeaInvestment IdeaInvestment Idea
03-Mar-14 1
Investment IdeaInvestment IdeaInvestment IdeaInvestment Idea
Do You Know? Do You Know? Do You Know? Do You Know?
A company that in last 5 years has grown7777xxxx in market cap
4444xxxx in Revenue
12121212xxxx in EBITDA
6666xxxx in PAT
2 consecutive years of bonus
03-Mar-14 2
2 consecutive years of bonus
2 years of dividend
Shareholders wealth has increased at CAGR of 58.47%
How did the Company achieve this?How did the Company achieve this?How did the Company achieve this?How did the Company achieve this?
Niche products
Change of management in Feb 2010 – turning point
Fund infusion by new promoters
03-Mar-14 3
Fund infusion by new promoters
Promoter’s convictions
Clean Management
Market DataPrice Date 25/02/2014 Rs
Face Value 10
Market Price 109.9
Market Cap (Rs.Mn) 1,378
Equity Shares O/S (mn) 12.54
03-Mar-14 4
Equity Shares O/S (mn) 12.54
Book Value 29.96
52 Week High/Low 109.9/39.20
All time High/Low 109.9/1.36
P/E Ratio (TTM) 10.17
Promoter
63%FII
1%
Other
36%
Shareholding Pattern Dec 2013
Promoter FII Other
Market C
ap/TTM Sales
Market C
ap/TTM Sales
Market C
ap/TTM Sales
Market C
ap/TTM Sales
3.563.563.563.56
1.281.281.281.281.021.021.021.02
0.660.660.660.660.460.460.460.46 0.350.350.350.35
Pidilite Pidilite Pidilite Pidilite
Industries Ltd Industries Ltd Industries Ltd Industries Ltd
(4)(4)(4)(4)
Godrej Godrej Godrej Godrej
Industries Ltd Industries Ltd Industries Ltd Industries Ltd
(11)(11)(11)(11)
Adi Finechem Adi Finechem Adi Finechem Adi Finechem
Ltd (13)Ltd (13)Ltd (13)Ltd (13)
BASF India BASF India BASF India BASF India
Ltd (18)Ltd (18)Ltd (18)Ltd (18)
DIC India Ltd DIC India Ltd DIC India Ltd DIC India Ltd
(22)(22)(22)(22)
Deepak Deepak Deepak Deepak
Nitrite Ltd Nitrite Ltd Nitrite Ltd Nitrite Ltd
(25)(25)(25)(25)
Market Cap/TTM SalesMarket Cap/TTM SalesMarket Cap/TTM SalesMarket Cap/TTM Sales
Market Standing Chemicals Co (48)Market Standing Chemicals Co (48)Market Standing Chemicals Co (48)Market Standing Chemicals Co (48)
03-Mar-14 5
(4)(4)(4)(4) (11)(11)(11)(11) (25)(25)(25)(25)
* Source: List of Engineering Companies as per Capital Markets Magazine, Moneybee
Advisors
Ratios was 0.59 in
the end of FY10
0.590.590.590.59
1.021.021.021.02
2010201020102010 Q3FY14Q3FY14Q3FY14Q3FY14
Mkt Cap/ Sales RatioMkt Cap/ Sales RatioMkt Cap/ Sales RatioMkt Cap/ Sales Ratio
Price/Book Value
Price/Book Value
Price/Book Value
Price/Book Value
7.147.147.147.14
3.23.23.23.2 2.972.972.972.972.292.292.292.29
1.41.41.41.4 1.121.121.121.12
Pidilite Pidilite Pidilite Pidilite
Industries Ltd Industries Ltd Industries Ltd Industries Ltd
(3)(3)(3)(3)
Adi Finechem Adi Finechem Adi Finechem Adi Finechem
Ltd (7)Ltd (7)Ltd (7)Ltd (7)
Godrej Godrej Godrej Godrej
Industries Ltd Industries Ltd Industries Ltd Industries Ltd
(9)(9)(9)(9)
BASF India BASF India BASF India BASF India
Ltd (14)Ltd (14)Ltd (14)Ltd (14)
Deepak Deepak Deepak Deepak
Nitrite Ltd Nitrite Ltd Nitrite Ltd Nitrite Ltd
(21)(21)(21)(21)
DIC India Ltd DIC India Ltd DIC India Ltd DIC India Ltd
(24)(24)(24)(24)
Price/BVPrice/BVPrice/BVPrice/BV
Market Standing Chemicals Co (48)Market Standing Chemicals Co (48)Market Standing Chemicals Co (48)Market Standing Chemicals Co (48)
P/BV terms company’s
standing end of FY13
was behind the BASF &
Godrej Ind.
P/BV terms company’s
standing end of FY13
was behind the BASF &
Godrej Ind.
03-Mar-14 6
31.8931.8931.8931.8930.2730.2730.2730.27
26.0226.0226.0226.02
20.3920.3920.3920.39
13.2613.2613.2613.2610.1710.1710.1710.17
Pidilite Pidilite Pidilite Pidilite
Industries Ltd Industries Ltd Industries Ltd Industries Ltd
(2)(2)(2)(2)
Godrej Godrej Godrej Godrej
Industries Ltd Industries Ltd Industries Ltd Industries Ltd
(4)(4)(4)(4)
DIC India Ltd DIC India Ltd DIC India Ltd DIC India Ltd
(7)(7)(7)(7)
BASF India BASF India BASF India BASF India
Ltd (9)Ltd (9)Ltd (9)Ltd (9)
Deepak Deepak Deepak Deepak
Nitrite Ltd Nitrite Ltd Nitrite Ltd Nitrite Ltd
(12)(12)(12)(12)
Adi Finechem Adi Finechem Adi Finechem Adi Finechem
Ltd (14)Ltd (14)Ltd (14)Ltd (14)
TTM PETTM PETTM PETTM PE
TTM PE
TTM PE
TTM PE
TTM PE
* Source: List of Engineering Companies as per Capital Markets Magazine, Moneybee Advisors
(3)(3)(3)(3) (9)(9)(9)(9) (21)(21)(21)(21)
PE expansion mainly because
of growth company posted
PE expansion mainly because
of growth company posted
Competitive strengths Competitive strengths Competitive strengths Competitive strengths
Competitative
International
quality Plant
Technical KnowG
howLowGCost provider
03-Mar-14 7
Competitative
Strengths
No competition in
domestic Market
Goodwill
Skills in Manu.
high quality
product
What Next?What Next?What Next?What Next?
� Expansion in current facility with minimal capex
� The company planning to set up new facility
� Product expansion – more value added products
� ReGrating of stock
03-Mar-14 8
� ReGrating of stock
� Strong Balance sheet
� Environmental friendly initiatives
Value Explosion?Value Explosion?Value Explosion?Value Explosion?
We expect Market Cap
of the company to increase by
4x times
03-Mar-14 9
4x times
in coming
5 years
Company OverviewCompany OverviewCompany OverviewCompany Overview
� Manufacturing of speciality fine chemicals Viz. OleoChemical and Intermediate Neutraceutical & HealthProduct
� Adi Finechem Ltd. Was formally known as H.K Finechem
� Clientele include
� Riken Chemicals
� Cargill
Sole Manufacture of Mixed Tocopherol
03-Mar-14 10
� Cargill
� Cognis Corporation
� Tama BioGchemicals
� Asian Paints
� Goodlass Nerolac
� ADM
Tocopheroland Dimer Fatty
Acid in India
PRODUCTSPRODUCTSPRODUCTSPRODUCTS
Mixed Mixed Mixed Mixed
TocopherolsTocopherolsTocopherolsTocopherols
SterolsSterolsSterolsSterolsMonobasic Monobasic Monobasic Monobasic
AcidAcidAcidAcid
03-Mar-14 11
Products
DimerDimerDimerDimer AcidAcidAcidAcidLinoleicLinoleicLinoleicLinoleic
AcidsAcidsAcidsAcids
Financial OverviewFinancial OverviewFinancial OverviewFinancial Overview� Revenue has grown from Rs.580 mn in FY11 to Rs.1229 mn in FY13 at a CAGR
46%
� EBITDA has grown from Rs.103mn in FY11 to Rs.170.4mn in FY13 at a CAGR of 28%
� PAT has grown from Rs.51mn in FY11 to Rs.84mn in FY13 at a CAGR of 29%
03-Mar-14 12
For the 9Month ended FY14For the 9Month ended FY14For the 9Month ended FY14For the 9Month ended FY14
� Revenue has grown by 15% from Rs.936 mn in FY13 to Rs.1075 mn in FY14
� EBITDA has grown by 61% from Rs.136mn in FY13 to Rs.219mn in FY14
� PAT has grown by 112% from Rs.58mn in FY13 to Rs.123mn in FY14
Profit & Loss
DESCRIPTION MarG11 MarG12 MarG13 MarG14 MarG15A A A E P
Revenue 573.6 974.07 1228.7 1487.5 1902.7
EBIDTA (Ex OI) 104.8 142.1 170.4 313.4 419.9Margin 18.27% 14.59% 13.87% 21.07% 22.07%
Rs. Mn
03-Mar-14 13
Margin 18.27% 14.59% 13.87% 21.07% 22.07%
PBT 79.1 107.8 127.2 263.3 367.9Margin 13.79% 11.07% 10.35% 17.70% 19.34%
PAT 50.6 73.6 83.6 176.8 250.2Margin 8.82% 7.56% 6.80% 11.89% 13.15%
ContactContactContactContact
Dhiren Shah, MD
M. Com, LL. B, FCA, Grad CWA
dir: +91 22 4030 2001 m: +91 98337 70404
Ritesh Mistry, Sr. Associate
B. Com, MBA –Finance
dir: +91 22 4030 2052 m: +91 98921 46421
Moneybee Advisors Pvt Ltd
303, Tower A, Peninsula Business Park, G. K. Marg, Lower Parel(W), Mumbai 400 013
b: +91 22 4030 2010 f: +91 22 4030 2000
e: [email protected] w: www.moneybee.in
skype: moneybee.advisors tweet:@MoneybeeAdvisor
blog: moneybeeadvisors.wordpress.com
facebook: MoneybeeAdvisors linkedin: Moneybee Group
03-Mar-14 14
Disclaimer:1. This Report is prepared on the basis of the sources of information provided by the management of the Company. We have not independently verified any
of the information so provided.2. We assume no responsibility for the accuracy and completeness of information presented in this Report and will not be held liable for it under any
circumstances. We have not made an appraisal or independent valuation of any of the assets or liabilities of the Company and have not conducted an audit, or due diligence, or reviewed/ validated the projections/ financial data provided by the Management. We have relied on the judgment of the Management and auditors of the respective companies in understanding the contingency nature of liabilities; accordingly our valuation does not consider the assumption of contingency liabilities materializing.
3. Our analysis is based on the market conditions and the regulatory environment that currently exists. However, changes to the same in the future could impact the Company and the industry it operates in which may impact our valuation analysis.
4. For our analysis, we have relied on published and secondary sources of data, whether or not made available by the Company. We have not independently verified the accuracy or timelines of the same.
5. Neither Moneybee nor any of its affiliates are responsible for updating this Report because of events or transactions occurring subsequent to the date of this Report. Any updates or second opinions on this Report cannot be sought by the Management from external agencies including other offices of Moneybee without its prior written permission