Hello Sir,
Hope you are doing well.
I like companies that show this uncanny ability of growing sales year after year. Obviously, one needs to look at other parameters, but growth is an important factor for us when recommending and investing in stocks.
Recently, came across Amines & Plasticizers. This is a small company but has a decent track record of year on year growth in sales and profits over the years.
What's interesting is that it's believed to be one of the largest producers of ethanol amines, morpholine, etc. Below, we have shared notes from the ICRA credit rating report on the company.
Hope you find the details useful in your search of investment opportunities.
Before that, a few days back we released our New Stock Recommendation for Alpha and Alpha + Members
It's a minerals processing company, largest in its segment, has captive raw material sources, grown PAT by ~300% in the last few years, de-leveraging balance sheet, 2nd generation promoters and available at only ~6 times post-tax earnings.
You can get it along with other recommendations, by subscribing HERE
Amines & Plasticizers (APL) - Notes from Aug'22 ICRA Credit Rating report
- APL was incorporated in 1973 to take over the project of India Carbons Limited (ICL) for manufacturing 3,000 tonnes of plasticizers (DOP-di-octyl phthalate) per annum
- Initially, the company commenced operations by manufacturing plasticizers used in polyvinyl chloride (PVC), which derives its ultimate application in the plastic industry
- APL diversified its product profile and started manufacturing different varieties of organic and inorganic chemical compounds like ethanol amines, alkyl alkanolamines, plasticizers, morpholine, alkyl morpholines and gas treating solvents (mainly methyl diethanolamine) and morpholine oxide, which are used in oil refineries, natural gas plants, ammonia plants, petrochemical plants, pharmaceuticals, textile, oilfield chemicals, cosmetics and the agrochemical industry
- At present, APL is one of the largest producers of ethanol amines, morpholine, alkyl morpholine and gas treating solvents in India
- APL’s main products include MDEA used in the petrochemical industry and at oil refineries, EMEA used in the pharmaceutical industry, and NMMO used as a solvent in the viscose fibre industry
- APL has a healthy share in these product segments in the domestic market and also caters to reputed companies in the overseas market
- It generates about 40-50% of its overall revenues from exports, mainly to Iran, Turkmenistan, Taiwan and Turkey
- The company’s orders comprise of fixed-price long-term contracts as well as spot contracts and has ability to partially pass on volatility in input costs in some contracts
- In FY2022, while the company witnessed a healthy revenue growth of 27%, driven by a 19% growth in volumes (ethanol amines) and a sharp growth in realization, its operating profit margin moderated from 12.0% in FY 2021 to 7.1% in FY 2022 due to a sharp increase in the prices of raw materials and natural gas
- APL depends on a sole supplier for the sourcing of a major raw material, ethylene oxide (EO), which accounts for about 33% of the raw material cost
- The company has a modest capex of Rs 2-4 crore annually in the next two years which would be met through internal accruals
(End)
Disclaimer: This is not a recommendation to buy/sell Amines & Plasticizers. 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.
SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
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