Hello Sir,

Hope you are doing well.

Markets have corrected a bit in the past few sessions. As they say, it takes a prepared mind to capitalize on the opportunities and we therefore keep searching for new Investment opportunities.

Recently, Valiant Organics came to our notice. This stock did extremely well from Oct'16 to Nov'20 and went up almost 10 x during the mentioned period. However, since Nov'20, the stock is down 60% and this is what got us interested.

Off-late the performance of the company has also turned bad with a sharp dip in margins and profitability.

Below, we have shared notes from the Q1 FY 23 presentation of the company to know the reasons for the dip in performance. Hope you find them useful for your own investments or to add the stock to your watch list:

We have been running stock recommendation services since 2011. For the sake of transparency (good, bad, everything), we have put up the entire list of recommendations (as latest as Sep'22) for everyone to see @ - Click HERE 

Valiant Organics - Q1 FY 23 presentation notes
  • One of the largest Chlorophenol derivatives manufacturer globally
  • One of the largest domestic PNA manufacturer
  • Amongst 1st few domestic PAP manufacturers
  • One of the leading manufacturer of Benzene derivatives products
  • Diversified client base across Pharmaceuticals, Dyes & Pigments, Agrochemicals and specialty chemicals
  • Total Production Capacity of 70,000 TPA
  • Key chemistry includes Chlorination, Hydrogenation, Ammonolysis, Acetylation, Sulphonation, Methoxylation amongst others
  • Primarily focused on manufacturing specialty chemicals that have a high demand but low supply and are primarily dependent on imports
  • FY 22 revenue share - 31% hydrogenation, 31% ammonolysis, 29% chlorination and 9% others
  • Manufacturing footprint -
    • CHLORINATION – SARIGAM • Capacity: 18,000 MTPA
    • AMMONOLYSIS - VAPI • Capacity: 9,000 MTPA
    • AMMONOLYSIS - TARAPUR • Capacity: 6,600 MTPA
    • HYDROGENATION – JHAGADIA UNIT 2 • Capacity: 12,000 MTPA
  • Q1 FY 23 performance -
    • Q1-FY23 financials were impacted primarily due to the unfortunate blast at Chlorination plant in Sarigam leading to shutdown for an extensive period of time, as well as subdued demand of hydrogenation products and mandatory maintenance shut down at one of Ammonolysis plant
    • The Sarigram plant has resumed partial operations since 21st July 2022, although it will take a few weeks to restore to normalcy due to ordering/delivery/erection of new machinery. The cost of damage and loss of business is covered under insurance
    • Price volatility stabilized to a certain extent in Q1-FY23 for key raw materials and the positive impact of this will be seen in the quarters ahead if the market dynamics continue to remain the same

Recently, we released our new stock recommendation for our Premium Members. It's a leading Pharmaceutical company with global leadership in its product segment, net debt free and available at very reasonable valuations. Can read about the company HERE


Disclaimer: This is not a recommendation to buy/sell Valiant Organics. These notes are as announced by the companies on exchanges and only for the purpose of information and education.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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Name: Ekansh Mittal     Email Id: [email protected]    Ph: +91 727 5050062

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