Saturday, March 29, 2014

CAMPHOR & ALLIED PRODUCTS LTD - JOINING HANDS WITH A WORLD LEADER















 Camphor and Allied Product is a niche play in Indian Specialty Chemical Segment. It is  the largest exporter of specialty aroma chemicals from India . Its product range includes fragrance chemicals such as amberone, pharmaceutical products like  camphor and terpineols, aromatic chemicals like  citwanene, and  industrial chemicals such as alpha pinene.This company taken over by one of India’s largest fragrance manufacturer Oriental Aromatics Limited in 2008 at a price of Rs.167 per share.Using the modern technology of Dupont ,USA  CAPL is the largest manufacturer and pioneer in Turpine Chemistry in India. Company’s  products are mainly  exported to Europe, UK and US for use in flavours, fragrances, pharmaceuticals, soaps, cosmetics, tyres, paints , varnishes...etc.

                                                                                           Not only the status of India’s largest aroma chemicals manufacturer but its new relation with  AganAroma & Fine Chemicals    which is a subsidiary of Makhteshim Agan Group -an affiliate of ChemChina - ( Chem China is  the largest Chinese chemical company ) creating interest in CAPL . As per the agreement with Agan  ,high margin products produced at company’s new plant located at Vadodara will be marketed by Agan worldwide . Agan will also provide technology expertise to camphor. Company claiming this  is the world’s most advanced plant for manufacturing high margin Musk and related products.Last year company started commercial production from this facility and the recent results of the company speaking for itself.

Now company is planning to give priority to reduce its debt .Last year company sold a non core land asset to limit the dependency of debt for setting up the new plant.Last year company also skipped the dividend due to this reason .With robust performance in  ongoing financial year ,let us hope the company will back to dividend list in this year.In the latest  December quarter  CAPL reported a turnover of Rs.77 Cr ( last year same period Rs.54 Cr) and net profit of Rs.8.20 ( Rs.4.5 Cr) .For the nine months  of this FY ,CAPL reported a net profit  of Rs.14.53 Cr and an EPS of Rs.28.30 .Now company completed major capex and result of the same started to flow .



                                       Click on the figure for a better view


CAPL  is  in a  niche segment backed with strong support of a world leader but  a less researched company  by market participants  . With revival in western economies, scaling up the production capacity to full utilization level ( Currently around 75-80 % level) , reduction in debt using improving cash flow ,possibility for  further expansion in relationship with Agan  ..etc ,  company is expected to report even  better numbers going forward.


Recommending to invest with a long term view at CMP of Rs.182 .Stock listed only in BSE


Link to Company website HERE

Link to Agan Aroma HERE

Link to Makhteshim Agan Group Web site HERE

Disc : It is safe to assume that I have vested interest in CAPL



63 comments :

  1. VP sir,
    If post election the RE appreciates then how it will affect the working of the company going forwrd as market has built up the price anticipating RE dep.

    ReplyDelete
    Replies
    1. Major portion of raw material is sourcing through import which will cushion rupee effect .

      Delete
  2. I am skeptical about management of caplin lab and also nath biogene.In the past they have not bothered about their investors at all.I know,since my comments are negative you may not publish it and I also know that on such true but negative aspect, you too never reply us.It is upto you to make a reply or not.Thanks.

    ReplyDelete
    Replies
    1. You have freedom to be skeptical or positive on any management.I clearly expressed my stand on both these companies in my posting and comments below each posts .I think you read only the heading and not the rest.In case of Caplin Point ,management paid dividend continuously as and when they started making profit and they even paid 25% dividend last year.What do you mean by they not bothered about investors .What a management can do more than making profit and distribute it with share holders ? .Now they started a world class injectable facility too... Purposefully cheating investors and bad performance due to unfavorable business environment is totally different .

      Delete
    2. I have bought Nath Bio on your recommndation as well , I have heard the management issues the company had but is it safe to hold long term since i do have the capacity to take risks ..... Your view ?

      Delete
    3. On whose conviction you bought the stock ? .

      Delete
  3. sir, once again congrats for the fantastic research of CAMPHOR ALLIED
    if u get time then please request to u sir whats your personal view on This two cos. stel holdings & Sree rayalseema hypo
    STEL HOLDING MKT CAP 23 CR & INVESTMENT HOLDINGS IS 220 CR .all RPG group shares
    SREE RAYALSEEMA HYPO is also holding shares of sree rayalseema alkali.also likey to turnaround.
    any view buy , sell or hold.
    please reply your view is very important & i am also give 100% weight on your view.....
    thanks once again

    ReplyDelete
    Replies
    1. I am not a big fan of investing in holding companies. Such companies holds shares of their own group company and they will not realise any profit by selling stocks due to possibility of loss of control .Only income is dividend from their holdings.This companies are suitable if and only if there is any chance for hostile take over attempts which is rare in India.


      Not tracking Sree Rayal H.

      Delete
  4. Sir,

    Do they have pricing power?

    ReplyDelete
    Replies
    1. New plant is for high margin products.

      Delete
  5. Sir . Please your view upon dishtv if is it buy at cmp

    ReplyDelete
  6. Thanks for your valuable research Sir, Do you track Seamec ? I have bought it at 80 , What do you suggest in case you track it ?

    ReplyDelete
  7. Hi VP...Lactose India that you had recommended @17 is currently @9.52...the priced has halved...I know nothing has changed fundamentally with the company. Moreover as you said "not recommending it but only sharing some information"...can you share some information whether we should exit or keep waiting with patience.

    Appreciate your reply.

    ReplyDelete
    Replies
    1. Nothing has happened so far ,but promoters decision to hike their stake in the company is positive.

      Delete
  8. Sir I need your view on Sean Exploration.Is it a good buy @CMP. I have a long term view on this stock.Please do reply.

    ReplyDelete
    Replies
    1. Recommended more than once ( Use search option to find) .Requesting to HOLD @ CMP.

      Delete
  9. Why sir u dont want to comment on elder healthcare...

    ReplyDelete
    Replies
    1. Discontinued tracking this stock when they decided to merge with Elder pharma .But later they skip their plan.

      See the links below

      http://www.bseindia.com/corporates/anndet_new.aspx?newsid=54d7acb2-4b68-4a1c-91ef-14f5a5f76bcb

      http://www.bseindia.com/corporates/anndet_new.aspx?newsid=344333fd-6f10-4873-be63-fa518729f1f9

      Delete
  10. Hello sir, needed or views on viceroy hotel, hoping for a reply from your side thanks shailesh

    ReplyDelete
    Replies
    1. Not expecting any out performance in hotel sector in medium term.

      Delete
  11. Sir, I want to know what is the story of APM Industries, seems to be a value stock. You had recommended it in 2010, then the stock has gone down. What happened? I couldn't find a website for the company and thus only way to track is through filings with BSE.

    ReplyDelete
    Replies
    1. Actually this stock almost doubled from the current level.When I recommended this in 2010 ,its FV was Rs.10 .In 2011 company issued 5 shares for 1 by reducing FV to Rs.2

      Link to group website below

      http://www.orientsyntex.com/

      Delete
  12. Should I enter at current level in BALAJI AMINES or should wait for more correction?Already corrected from 54.8 to 39.5
    You recommended before few months so I undersand there's no changes in fundamental during a short period so as no changes looks possible in your previous view.But,falling stock price from higher level is concern.

    ReplyDelete
  13. Span diagnostics -

    1. Business sale is on for a consideration of more than 100/- per share. .
    2. The share price is hovering around 38-40.

    These two should not go together. Again, Market has up to date knowledge, Am I missing something?

    May be you Could throw some light

    ReplyDelete
    Replies
    1. Utilisation of amount received is purely the management's decision.Uncertainty about it keep the share price at current level.

      Delete
  14. I am holding some good numbers of Klipest for last 2.5 years. Its price is very much decreased from my buying price...also testing my patience. So thought seeking for your recommendation before selling.

    Appreciate your response!!!

    ReplyDelete
    Replies
    1. Stock started do decline when it included in Periodic call auction about 1.5 years back .Since promoters pockets are not deep ,they are inducting money into new subsidiary at a slower speed. Because of this reason it may take more time than expected earlier to increase business.

      Delete
  15. What is your advise on GMM PFAULDER at current level?
    Thanks for everything
    Someone posted interesting words on M3 board that
    Most of Multibaggers born at VP SIR'S blog.

    ReplyDelete
  16. Respected Sir.
    I need your view on Liberty Shoes.I have bought it @CMP.I have a long term view on this stock.Can it give good returns in future given the kind of positive steps which the management is taking.Please do reply.Thanks in advance :)

    ReplyDelete
    Replies
    1. Stock appreciated about 50 % from the recommended level.Entry price is also an important factor in any investment. Not a bad stock though.

      Delete
  17. Sir, holding huge quantities of dena bank @ 66. What to do ?

    ReplyDelete
  18. hi sir,

    I have bought SMS pharma in price of 262.As this has gone done need your advise whether can i avg it.Sugest pls

    ReplyDelete
    Replies
    1. I believe stock will recover post full year result.

      Delete
  19. Sir;
    I have seen orient bell having huge volume on Friday 2lac plus. On daily basis volume are below 10k. Something news will come as drastic change shown in volume. One can enter at 50 rs for long term perspective advice me

    ReplyDelete
    Replies
    1. Since this is year ending many account adjustments ( profit/loss booking ) happening in these days .It is early to reach a conclusion only on the basis of extraordinary volume in these days . This may be between two different accounts of a single party or related party .Anyway ,if there is some recovery in construction sector due to bold steps of new govt ,stocks like orient are expected to perform well.

      Delete
  20. Sir, I have 20,000 suzlon @ 26, is it better to average it now or exit.
    Or wait for 5years from now..?
    your advice please..!

    ReplyDelete
    Replies
    1. I hope issues will be resolve to a great extent in 5 years.

      Delete
  21. i hv started trackin Camphor abt a month back.... the main reason for me was growth in gross block from ~ 34 cr to now 125 cr. this has started reflecting in top line growth in last two quarters.... implying earlier asset turnover, i believe co. is set for higher turnover.

    margins might hv been compromised a bit for the higher over heads but higher utilisation of plant wud take care of

    ur suggestion plz.
    thanks

    ReplyDelete
  22. Hello VP,

    In the recent market rally, few good stocks like Britannia and Dr Reddy's have corrected a bit. Can they be bought at CMP?

    Thanks,
    Tushar

    ReplyDelete
    Replies
    1. It depends on your purpose .If you are planning it to be included in your core portfolio ,you can buy them in an SIP mode. But if it is for medium term .if a strong govt come to power these type stocks may under perform .

      Delete
  23. Shall I invest in GVK Power for long term?

    ReplyDelete
  24. Hello VP

    Camphor- After thin volumes and all buyers yesterday, the stock hit the upper circuit of 220.4 today morning and is now trading at 203 with much higher volumes(17k+ in 40 minutes of trade)..Original recommendation was at 182 but the stock was locked in circuit after that..Is it still a buy at 203-205 levels?

    ReplyDelete
    Replies
    1. Still I believe it is worth buy for an investor at least with a medium term view.

      Delete
  25. Sir, I wanted to know why sundaram multi paper is falling since last month. I am unable to find the reason as there is no related news available. Can you throw some light on this?
    Thanks

    ReplyDelete
    Replies
    1. News is already there .Pledged shares selling

      Delete
  26. Any negative news in Camphor, went all the way from 220 to 184 in one session?

    ReplyDelete
    Replies
    1. I too really surprised to see such a panic selling like there is no tomorrow. As far as my understanding there is no negative news .I believe company will report better numbers in coming quarters.

      Delete
  27. Sir, my comments are not getting published though i tried many times. I had requested for your views on Nitin spinners and Neo corp international. Sorry if it is disturbing you.

    ReplyDelete
  28. Sir I have 50k shares of vikas wsp at a price range of 12rs what should I do keep for long term plz advice

    ReplyDelete
    Replies
    1. I am skeptical about the promoters of Vikas ,hence not tracking the stock.

      Delete
  29. hello sir.... many thanks for ur supreme research.... u r really a genius...
    i have sunshield ... i am holding them for a long....
    and i also have LINDE ... will u pls provide me comment on it thanks

    ReplyDelete
    Replies
    1. Not tracking Linde.In case of Sunshield, I believe it is only a beginning.

      Delete
  30. Dear Sir,
    First of all I want to thank you for sharing such and extensive research on stocks.I have learned and earned a lot by following your blog.
    Please provide your view on SPIC if possible

    ReplyDelete
  31. Dear Sir,
    Your view on SPIC.
    Thanks in advance.

    ReplyDelete
  32. Dear Sir,

    Is it advisable to buy NITCO now ?

    Soumen

    ReplyDelete
  33. Dear Sir,
    Camphor has seen a new high today.
    What are your views given the over 50% increase in share price post your recommendation some three months ago?
    Many thanks for your help and assistance.
    Please continue educating small investors like me.
    Regards and best wishes
    Sebastian

    ReplyDelete

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