Saturday, November 30, 2013

BALAJI AMINES LIMITED - WORKING HARD ,WINNING BIG ....






Balaji amines Limited ( BAL) is a chemical manufacturer   which introduced many  ‘ First of its kind’ import substitute products in India through indigenously developed technology using their R&D skills. BAL is specializing in amines and specialty chemicals  which find applications in the production of  wide variety of products in Pharmaceuticals,Agrochemicals,Packaging,Explosives,Dyestuff ..etc. What is special with this company is its thrust on R&D to develop indigenous product.BAL put an end to the monopoly of Global chemical giants like BASF and Ashland Inc in India at least in five products viz  NMP, NEP, Morpholine, 2-P, GBL, PVPK-30. Now ,company grown as the world’s largest producer of Di- Methyl Amine Hydrochloride and commanding close to 85 % market share of this product.BAL is the largest producer of methylamines and their derivatives in India with a market share of over 60%.Company’s manufacturing facilities are approved by many foreign countries which helping them to command an edge over Chinese producers in some products which  export to high margin markets like EU countries.

                                                                      What is making it an attractive bet at this point is both the positive developments happening in the industry as well as in  the company. After few sluggish years ,prices of its products are started to show firm trend in domestic and international market. Last year company earned an income of Rs.131 cr from export alone and rupee depreciation may give extra margins to a certain extent. Next is its increasing production capacities .Recently company commissioned  two new plants ,one for Di-Methyl Amine Hydrochloride and the other for Di Methyl Formamide .Production from both these plants are expected to scale up and stabilized in near months. Recently company received Certificate of Suitability from EU for their niche product PV P K 30 ( company is the only producer of this product in India) which will help BAL to export this product to regulated markets. As part of utilizing its idle land assets ,recently company started  the first five star hotel in Sholapur (Balaji Sarovar Premiere) . Promoters of BAL is not actively participating in the day to day operations of this hotel and its entire operations are handed over to Sarovar group. This ensures promoters concentration in core  businesses and it seems only part of an effort for asset creation.In addition to this already developed land ,company having another 300 ( Three Hundred)  acre surplus land in Solapur itself.


                                                     On the financial front ,company started to report improving performance . In last FY company reported a topline of Rs.512 Cr and a net profit of Rs.31 Cr .During the latest September quarter BAL reported a turnover of  Rs.161 Cr ( Rs.126 cr in same period last year) and a net profit of Rs.12 Cr ( Rs.9 Cr) .Company also distributed a dividend of 40 % .It is expected to close the full year with an EPS of Rs.14 or more.In a recent interview, promoters assures their plans to reduce the debt substantially in next two years from the current level. As an indication of their increasing confidence in the  company , they are continuously hiking their stake  through open market purchases in past three quarters.



Balaji Amines is a company offering many niche and monopoly or near monopolistic products and one of the few companies from the chemicals sector  paying higher attention for R&D to develop new products. Even this company started as a small unit, now it grown as a threat to multinational  chemical companies in many niche products.At CMP of Rs.41 ,it is trading at a one year forward P/E multiple of just 3 . Expecting decent upside from current level , hence recommending a BUY @ CMP Rs.42.Stock listed both in NSE and BSE.

Link to Corporate Video HERE

Link to Company Website :HERE

Link to Latest Annual Report  : HERE

Link to Hotel Project    : HERE 






64 comments :

  1. Dear Sir,
    Thank you very much for your valuable insights....Expecting your valuable view on Sun Pharma Advanced Research for 1 - 3 months time frame...

    Thanking you again
    Rajesh Patel

    ReplyDelete
    Replies
    1. Research oriented companies like Sun Pharma Advanced is not suitable for an investment with a specific time frame .It is a high risk high profit kind opportunity with a possibility to generate unbelievable returns .But no one can predict a specific time frame for these type companies.

      Delete
  2. Sir
    Can you please advice can I buy IFGL RECTIFIER and shathi pump at cmp for 2-4 yrs hold
    Thank you sir

    ReplyDelete
    Replies
    1. Many investors are asking similar questions about many stocks. They are reluctant to buy when recommending a stock and later ask whether it is a buy when the same stock appreciated 20 or 30 % . Buying only at higher rate may be a strategy in market .But , for me equity is an asset and I would prefer to buy it when it is available at cheap valuation .I am not against buying any stock at its life time high rate but that should be cheap even at its high rate compared with its real worth .Frankly speaking , I am not a great fan of technical analysis and trading but prefer to stay only as an investor.

      Delete
    2. Excellent advice from you Sir. we will try to follow the same.

      Thanks,
      Raj.

      Delete
  3. hi VPji

    Ashapura Minechem has appreciated by 25% approx. since your reco..
    thanks for your advise. shouldi sell it now or hold for some more time?

    p k

    ReplyDelete
  4. Dear VP sir
    what is your current view on Aditya Birla Chemicals (India) Ltd its now trading your recomonded price 90 pe 5 H1 results ok not bad
    I would like to buy please comment on this

    ReplyDelete
  5. dear vp,
    kindly share your opinion on Astral Poly if any..

    regards

    vimal kumar

    ReplyDelete
  6. Dear sir,

    I am asking you the same question for the fifth, but unfortunately i am not getting the reply, i know this share is not your recommendation, even though if you have a view please comment about Natco pharma at current cmp.

    ReplyDelete
    Replies
    1. Many times in the past commented about this stock.Not a bad company , prefer to enter in a correction

      Delete
  7. VP Ji ,

    what your long term view for marksans pharma and sunshield .
    I am holding marksans pharma from march 2013 and sunshield purchase on 29th November 2013.

    Also please suggest future development in above two company.

    Regards
    Sunil Agarwal

    ReplyDelete
    Replies
    1. Marksans already appreciated 200 % from the current level .Not recommending further buy at this level till some clarity emerges about their FCCB repayment plan.

      I believe ,there is a long way ahead for Sunshield with the support of world leader Solvay.

      Delete
    2. thanks sir for your valuable suggestion.

      Delete
  8. Hi VP Sir - Request you to give your views on Arvind and Kitex Garments

    ReplyDelete
  9. hello sir,
    kindly share your views on the textile sector. sector is heavily underowned.pls suggest if its the right time to have a look.

    ReplyDelete
    Replies
    1. Under valued and under owned sector, re-rating is a possibility

      Delete
    2. Thanks sir.
      Considering top down approach, any company of your interest.pls suggest.
      Nahar spinning and TT L looks good..pls share ur views ig tracking.

      Delete
    3. Wold prefer to stick with companies with good brands like Raymonds

      Delete
  10. Great blog, whts your view on atul ltd and atul auto

    ReplyDelete
    Replies
    1. Not tracking Atul

      Atul Auto recommended even before bonus @ Rs.71

      Delete
  11. sir.........
    wats ur view on wockhardt for longer term after recent import alret on chikatlana plant? can we accumulate it at current levels or should wait for levels towards 300?
    plz replyyyyyyyy

    ReplyDelete
    Replies
    1. Please avoid repetition ,same question answered within last three days.

      Delete
  12. Dear VP,
    Do you have any opinion on POLARIS plz.....

    ReplyDelete
  13. What are your views about the Sugar Industry and stocks like Balrampur Chini Mills Ltd and Shree Renuka Sugars Lttd.

    ReplyDelete
    Replies
    1. Not expecting any big positives during this election year

      Delete
  14. What is your view on Anil limited recommended by you in Feb 2013 at current Market Price of Rs 90.

    ReplyDelete
    Replies
    1. Valuation in cheap due to its inclusion in PCA

      Delete
  15. Search button seems to be not working, Kindly check

    ReplyDelete
  16. Sir,
    Alphageo volumes are very less, can that be a concern - if it gets into PCA in Jan.

    Thanks,
    Sunil

    ReplyDelete
    Replies
    1. Till the last day of quarter we can't say anything about it.A single bulk deal can change the equation.

      Delete
  17. Sir,
    Ifgl refractories shifted to T Group.
    Is it a cause of concern ?

    ReplyDelete
    Replies
    1. Concern for traders ,not for investors

      Delete
  18. your valuable advice on suven life

    ReplyDelete
    Replies
    1. May be a market performer from here on

      Delete
  19. Dear Sir, can i consider Apollo Tyre at the current market price in view latest developments.

    ReplyDelete
    Replies
    1. Decrease in raw material price is OK,but uncertainty about cooper deal is a reason for concern.

      Delete
  20. Sir r u providing any paid service

    ReplyDelete
    Replies
    1. Sorry,not offering any paid service.

      Delete
  21. Sir Gokaldas's Madanlal J Hinduja has sold some shares in last 3,4 days while the stock is hitting upper circuits. Isnt it little worrysome..

    ReplyDelete
    Replies
    1. He sold his entire company to Blackstone few years back .But still old promoters holding close to 19 % .If they offload these entire shares in open market (not through bulk deal ) that may affect the price movement.

      Delete
  22. hello sire, please provide ur views on nectar life and morepen pharma

    ReplyDelete
    Replies
    1. Better cos are available in pharma space,pump and dump can't ruled out in these stocks

      Delete
  23. Dear sir
    what is your view on bharat agri fert & realty ltd this stock

    ReplyDelete
  24. Hi Sir,

    Would like to know your current views on old recommendation NBCC.
    After hitting 194 you asked to book partial profit but i missed it. Can I enter in this counter @cmp 135 for long term. It's debt free copany having NO shares pledged and considering the thing that revival of construction sector.

    Pls advise sir.

    ReplyDelete
    Replies
    1. Earlier it recommended below Rs.100 ,try around Rs.120

      Delete
  25. Hi Sir,

    I have been posting my queries but none of them got approved. I am reading your blog since September and Investing in stocks suggested in this blog. Please approve my comments.

    Thanks
    Venkata Sagi

    ReplyDelete
    Replies
    1. Not giving any preference to any one ,only the relevance of question is important.Please avoid questions regarding cos answered within few days.

      Delete
  26. Hi Dear Sir,

    i was trying to buy Balaji Amines however it was on UC that's why i could not buy it can i buy no CMP if yes then what is the correct buy price

    Thanks,
    yogendra

    ReplyDelete
    Replies
    1. Stock was available to anybody before noon

      Delete
  27. dear sir pls share your view on vikas wsp

    ReplyDelete
    Replies
    1. Already expressed my negative views on this stock due to bad promoter history.

      Delete
  28. sir, pls give your valuable advise on Tech Mahindra..Is it a buy at current levels ...

    ReplyDelete
  29. excellent blog!! any advice on cigniti ? It seems to be doing really well..
    thanks

    ReplyDelete
  30. IS BALAJI AMINES STILL A GOOD BUY AT cmp?

    ReplyDelete

Followers

Tweet TopOfBlogs