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Hello Investors


In a move to control pollution, the Chinese government has cracked down on some dye & dye intermediary product manufacturing companies, which has led to the shutdown of a major dye manufacturer in China, which was contributing nearly 30% of global dye production. Close down of the Chinese units has led to shortage of products in the markets and prices of some of the products have increased sharply. As a result of which the companies in this sector will see better growth on financial front this financial year. Therefore here is a company available not only at cheap valuations but is also largest manufacturer of Dye Intermediates in India.

BACKGROUND

Bodal Chemicals Limited is an India-based holding company. The Company, through its subsidiaries, is engaged in manufacturing of dyestuffs, dyes intermediates and basic chemicals. Its geographic segments include domestic operations and external operations. The Company produces a range of chemicals, which are used as raw materials for dye intermediates and dyestuff.

Its products include Vinyl Sulphone Ester, H Acid, F C Acid, DASA, Gama Acid, 6 Nitro, Acid Black 210, Reactive Black BL/GR, Reactive Black B, Reactive Black 5, Acid Black 194, Sulphuric Acid, Oleum, Sulphur Trioxide and Chlorosulphonic Acid. It manufactures over 20 varieties of dye intermediates and over 150 variants in dyestuff, which are used as raw materials in textile, leather, paper and other dye consuming industries. The Company's manufacturing plants are located in Gujarat. The Company exports its products to China, Korea, Thailand, Taiwan, Japan and Europe.


FUNDAMENTAL VIEW


  1. The Increase in export demand during the current year shall result in increase of export portion in its revenues from around 40% at current to higher levels, this growth is not affected by demonetization.
  2. The stock after being beaten down by recent markets is available at P.E of 12, the industry P.E still being around 20.
  3. The company's ROE as per FY 15-16 stood at 36 % which is just exceptional and these figures are yet to improve in current financial year, as per the quarterly trends.
  4. The Company is also performing exceptionally well on liquidity front, below extract shows how the company is on its way to become debt free.
  5. As per a recent interview, the management is expecting a revenue above 1100 Cr and EBIDTA Margin of 20-21% for the current year, have a look : http://www.moneycontrol.com/news/business/what-risevinyl-sulphone-price-means-for-indian-dyemakers_7459061.html 
  6. The company is also undertaking diversification via its subsidiary companies Bodal Agrotech Limited and Trion Chemicals which on its full operations will yield an additional revenue of 350-400 Cr. (refer Annual report of FY 15 -16 for detailed info.)
TECHNICAL VIEW

  1. The stock is in long term uptrend and is technically bullish as shown under, the immediate support is around Rs.115 :
  2. However, as far as short term trend is considered the stock is currently weak (below its 50 DMA of 129),with a support of 109 (200 DMA).
CONCLUDING DECISION

Investors can look forward at CMP of Rs. 119 with a stop loss of Rs 109 for positive returns.

Best wishes for your Investment

Thanks !!!

      Note : The above is just information available in public domain and therefore should not be taken as research report.

     Registration status with SEBI:  I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations.

     Disclosure : I personally do not have any holding in this script, Investors are advised to consult financial advisory before any Investments.

   

Disclosure
** This Blog, its owner, creator /contributor is not a research analyst and expressing opinion only as an individual investor in Indian equities. He is not responsible for any loss arising out of any information, post or opinion appearing on this blog. Investors are advised to consult financial consultant before acting on any such information. All information in this blog is posted for personal study, All information posted on blog is as available in public domain.

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Such a nice information thank you so much for sharing this post.

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