Saturday, January 3, 2015

AMINES & PLASTICIZERS LTD -- KEEP IT IN YOUR RADAR


Prima facie Amines and Plasticizers may termed as a company operating in a sector – Chemicals-  which is boring and commoditised . But if we look into it deeply , we can realise it as a niche play in chemical sector itself and its R&D is working on a number of products to be used for futuristic applications.This company started with technical collaboration of  Napthachemie of  France (now a part of British Petroleum Plc).APL  is a pioneer and one of the largest producers of ethanol amines, morpholine, alkyl morpholine and gas treating solvents in India. Company is a global supplier of organic chemicals which find wide applications in oil refineries, natural gas plants, ammonia plants, petrochemical plants, pharmaceutical and agrochemical industries.Company’s products are well accepted in overseas market and exporting about 50 % of its total production. Company is the market leader of Ethanol amines and Alkyl Alkanolamines in India with a market share of 75 %.APL is also the world’s largest producer of N-Methyl Morpholine Oxide ( NMMO). The technology for producing NMMO is indigenously  developed by company’s  own R&D wing.



Scope of Company’s Products



As I mentioned above, company’s major products are mainly used in Industries like Oil Refineries, Natural Gas Plants, Ammonia Plants, Petrochemical Plants..etc. The main product Methyl diethanolamine is used as a sour gas sweetening agent. In the original form Natural gas is “sour” which means the  hydrogen sulfide( HS)  is present in amounts greater than 5.7 milligrams per normal cubic meters .The HS must be removed from this raw gas before utilizing it . Process of removing such toxic gases from natural gas is called ‘Sweetening’.  In addition to various types of chemicals ,APL producing industrial gases like  Oxygen,Nitrogen,Acetylene and Medical Oxygen..etc

                                                                      Another product company’s R&D is working on is to be used in “CO2 capture” . Since this is a new concept to many of us and many technical terms involved ,I am giving the Link HERE to understand more about this. As per the latest annual report of company , this product developed by its own R&D division is at ‘trial stage’ . Considering the strength and history of its R & D wing this may also turned as a success going forward. ( Its R&D wing wins many awards in the past from Government for developing many import substitute products) I believe the potential of this product is good especially at a time the entire world is taking lot of ‘Green Initiatives’ to protect the environment.

                                                                                        Products for Shale gas extraction is another field company is actively looking and R&D division is already in the process of developing products for this sector. This sector is presently at nascent stage and it may open up many opportunities in future. Company’s long  standing relation with world’s largest oil companies as an existing supplier of  various Oil/Gas exploration related products is expected to give an upper hand in this sector too.

                                                                                      In addition to this manufacturing business under the main company , APL having two subsidiaries – One operating in Project management and Execution Business (APL Engineering Service Private Limited) which is running a fabrication unit for pressure vessels at Khopoli  .  Merger process of this 100 %  subsidiary with APL itself is under process .The other one APL Infotech Ltd is  a 51 % subsidiary of APL which is specializing in    developing and deploying technical software .Company claiming success in developing a first of its kind software for pipe leak detection in collaboration with IIT, Mumbai. Such a product may find more acceptability when  piped LPG distribution extended to more  cities .



Valuation and Conclusion

In the last five years , company reported top line growth from Rs.170 Cr to Rs.243 Cr . Growth accelerated in recent times and it moved from Rs.192 Cr to Rs. 243 Cr in 2013-14 over 2012-13. In last financial year ( 2013-14) company reported a bottom line of Rs.3.3 Cr and an EPS of Rs.6. Company’s debt is at bit highr level and current debt equity ratio is 1.84 ( Reduced from previous years 2.04) . In last year company paid an amount of Rs.9 Cr as interest alone . I believe , commercialisation of company’s new products and entry into new markets started to contribute in recent times and if this trend will continue APL can reduce its debt in coming years.Till now company spend lot of amount to develop products and setting up manufacturing facilities and the benefits of the same is expected to reflect going forward. Pressure from working capital side may also ease once the world economy back to growth .The last two quarters in this FY itself showing such a trend ( Refer below table)







Price of Crude oil declined in recent past and the increased production of shale gas is mentioned as a major reason for this. Be it crude, Natural Gas or shale gas  ,APL will serve all these industries with its products.The other industries company serving – Pharma and Agrochemical- also having good growth potential.


Because of low equity base ( Rs.5.5 Cr) and higher promoter holding ( 73%) , liquidity is low for this stock.( Company already decided for a stock split  and this may sort out liquidity issue in next few months) .Considering the potential of company’s products and the growth momentum company showing in recent times , suggesting to keep this stock in your radar . High risk takers can even consider some exposure with a long term view . Stock is listed only in BSE ( Scrip Code- 506248) and currently trading around Rs.108

Link to Company Website HERE





* Part of information taken from documents available in public domain
   Disc: It is safe to assume that I have vested interest in APL.

136 comments :

  1. Dear VP sir, Could you please share your views on Next Mediaworks and Dhanuka Agritec if you are following these stocks

    Thank you
    Pssa..

    ReplyDelete
  2. Dear VP sir thanks a lot...

    ReplyDelete
  3. Thanks Sir for a very thorough analysis - sacbee

    ReplyDelete
  4. Seems to be a good stock, but considering the extremely low floating shares in the market it would be very difficult for the retail investors to buy on Monday. Or we could enter only at exorbitant price levels.

    ReplyDelete
  5. Finally recommended a great gem.... thanks a lot sir & Happy New Year....

    ReplyDelete
  6. Dear sir,
    I am a new comer to your blog, i saw your blog only on this new year, i wanted to invest, & studied thoroughly through your blog, i find SKM as potential multibagger, if you don't mistake me, can i buy at this rate. please help me sir, though i know i have to decide the price, since it is my first question, please suggest as per your views sir can i go for it at this price...

    ReplyDelete
  7. SKM is a company with lot of potential and uniqueness. If I am not mistaken, management quality is top and they are trying their level best to expand business and taking care to not repeat the past mistakes. As you are aware it is the only company got permission to export to Russia recently and the impact of the same may start from next FY. I am expecting good result from the company in coming quarter. If they report growth in December quarter on a YOY and sequential basis , an entry even at current level will give good return .I don't think it is a stock to trade for a few pennies but one to hold for long term. Business potential is good and real growth story is expected to unfold in future once it become a debt free company in another one or two years.

    ReplyDelete
    Replies
    1. wow....good question of Kalaivani with superb reply by VP sir. VP Sir your reply to Kalaivani's question will not only help him but also to small investors like us. Though my portfolio consists of SKM @40%, after your reply and confidence in the company once again, i will add some more on monday irrespective of price level. Thanks Kalaivani for asking such question and really hats off VP Sir for your reply and tenderness you shown to answer Kalaivani's question. thanks again.

      Delete
    2. Hi VP,

      I am expecting the demand to double in the coming year. But do you think that they would be able to source the eggs easily from the market/farmers? I know that SKM has own farm for eggs. But with increased demand they need to go to open market for eggs. Tamilnadu is one of the state which will not allow egg prices to shoot high. Sourcing the eggs to meet the demand will be a very high challenge for SKM.

      Delete
    3. Dear sir,
      It is an excellent reply, already i hold SKM, but as kalaivani pointed out, SKM is the multibagger for 2015, i will surely add more at that levels, Thank a lot for both kalaivani & vp sir.

      Delete
    4. @Gajendran Gaja

      Management recently indicated their willingness to grow through inorganic route too

      Delete
  8. dear vp
    pls share ur view on tilaknagar inds at current cmp, valuation looking cheap with good dividend yeild but iam not understanding why this mutual funds are selling this stock at current cmp, ur valuable suggestion is very helpful for me.

    ReplyDelete
    Replies
    1. Frankly speaking I am not much comfortable with their aggressive acquisitions without considering the pressure on balance sheet.

      Delete
  9. Sir I found mukund engg .ramkey infra. And gei industrial in your recommended list please suggest your present view in these stocks and can I but at cmp

    ReplyDelete
    Replies
    1. All these companies are victims of bad sentiments in infra space .Mukand and Ramky may recover once there is some improvement in sentiment .It is learned Ramky is trying to reduce their debt by selling part of assets . In case of GEI - It was a company with advanced technology but not sure whether they can keep afloat till revival happens in sector.

      Delete
  10. Dear sir,
    I am not able to calculate CEPS for any share. How can I get Operating Cash Flow and Diluted outstanding shares, because they are not mentioned in company's Balance Sheet.

    Thanks in advance

    ReplyDelete
    Replies
    1. Cash Flow statement is separate in Annual Report .

      CEPS is readily available in BSE website itself

      Delete
  11. Dear Sir,
    Your Views on Pennar Industries please?

    regards
    Anup

    ReplyDelete
  12. Dear Sir,

    Whats your view on JK Agri at CMP for a long term view (long term in the sense not less than 3 years).

    Please do suggest.

    ReplyDelete
  13. VP ji, pls give your views on Carborundum Universal.. a leading brokerage is highly recommending it at this time

    ReplyDelete
  14. Nice pick Sir, But daily volume is very less, Please put light on that.

    ReplyDelete
    Replies
    1. No meaning in expecting high volume in any stock if equity base is small and promoter holding is too high.

      Delete
    2. Thanks Sir for clearing my doubt.

      Delete
  15. Hello Sir,

    Wats your opinion abt Saksoft’s latest acquisition- ThreeSixty Logica

    How is company going to do in coming yrs

    Thanks

    ReplyDelete
    Replies
    1. No meaning in commenting anything without knowing the cost of acquisition , size of acquired company ,, means of finance ..etc

      Delete
  16. Dear VP,
    Any thoughts on Zicom security? Worth entering at CMP for 1-2 years?
    thanks

    ReplyDelete
    Replies
    1. Already recommended @ Rs.35

      Not a bad idea even at CMP for long term

      Delete
  17. Hi VP Sir,

    The total equity base is 55,02,000. you have mentioned 5.5cr, might be a typo just thought to highlight.

    ReplyDelete
  18. amines plastilizer is already appreciated 2 times in last quarter. Do you think it is worth buying at this level.

    ReplyDelete
    Replies
    1. Still this Rs.250 Cr company is trading at a market cap of less than Rs.60 Cr

      Delete
    2. sir,though i am posting my query as anonymous, still looking for answer for same . can you please tell us how you calculate company s value at 250 cr

      Delete
    3. Rs.250 Cr company means a company having Sales of Rs.250 Cr

      Delete
  19. Dear VP Sir, what is opinion about 1) Bharat Agri Fert & Realty. and 2) IL&FS investment managers ltd 3) Prime property development corporation. all these companies reported good results.

    ReplyDelete
  20. Hi Sir
    What's your view on ipca labs & Merck Ltd, the bad news about warnings for ipca would be resolved by 2016. Do you feel there is a chance to buy these.
    Thanks

    ReplyDelete
    Replies
    1. Both are not bad . Some temporary issues are there for Ipca

      Delete
  21. Dear VP Sir,
    Need your advise on Camphor and Allied Chemicals. Given the recent 40% drop in share price post its Q2 results, should we consider to Buy some more shares.
    Thanks
    Afra

    ReplyDelete
    Replies
    1. Still stock is up by Rs.100 from recommended level. Not a bad one for long term

      Delete
  22. Good evening Sir,

    May i have your opinion about 1.Meghmani Organics 2.BPL 3.Almondz Global.

    Thanks in advance.

    Have a great year ahead

    ReplyDelete
  23. Dear VP Sir, If you are tracking, could you please tell us your opinion about Unitech and Adani power. I am holding unitech @ 91, Adani power @ 56. Thanks in advance.

    ReplyDelete
    Replies
    1. If there is some clear cut policies by Govt in Power sector ,we can expect re-rating .

      Not tracking Unitech

      Delete
  24. thanks vp sirji give your opinion for vinati organic should i buy

    ReplyDelete
  25. Dhunseri Investment, Can we invest @ current level for a time span of 2-3 years?? please suggest

    ReplyDelete
  26. hi VP ..Can you comment on Aksh Optifibre in light of promoter selling .. Do you suggest to hold, sell or buy at this price of Rs16

    ReplyDelete
    Replies
    1. It is not a good sign .Keep a close watch and whether the same is continuing .

      Delete
  27. Is it advisable to enter at current levels in Swaraj Engine & Gujarat Automotive Gears ?

    ReplyDelete
  28. Sir i am holding 3stocks ur reco thats skm ,aimco ,hind tin...but i request give a comment on PPAP AUTOMOTIVE and CCLPRODUCTS....
    Sir i am to market n lost some money bt i feel i am n track now aftet followup ur blog..try to learn n put hard earned money at right place...
    Thanks in advance

    ReplyDelete
  29. VP sir..happy new year. Sir what about Maxwell Ind ...ktk bank and Patel logistic?

    ReplyDelete
  30. Sir. Please express your views on Gravita India.

    ReplyDelete
  31. Sir your views on cml creative merchants ltd
    Can I hold this stock

    ReplyDelete
    Replies
    1. What is in it ?

      I think , it is only a pump and dump game by operators .We can see many such stories in any bull market . Stick on fundamentals is the best policy for an investor.

      Delete
  32. Ur views on haldyn glass ?

    ReplyDelete
    Replies
    1. Some talk was there about mandatory packaging of certain medicines in glass bottles. If it happens , this company may benefit.

      Delete
  33. Dear VP Sir

    What's your view on XL energy? A company with 500 cr sales drops to 1 cr in 3-4 years
    Does it have any chances of revival.

    ReplyDelete
  34. Sir can you share your views on take solutions and xchanging solution from it sector

    ReplyDelete
  35. Hi VP Ji,
    Can we look at the Sudarsan Chemical at this price And consider competition of this recommendation!!!!!!!!
    Thanks
    Rajiv

    ReplyDelete
  36. VP sir,
    Happy New Year
    Sir kindly give your view on Pochiraju Industries Ltd. & Plastiblends India considering a long term (3years or more)

    ReplyDelete
  37. Sir what is opinion on Associated alcholol & brewery ltd historical data shows growth above 35% is it worth to look into

    ReplyDelete
  38. Happy new year to and your family dear valuepicks....Thanks a lot for your call on apl... do you have anything to say for Gujarat Automotive? looks good?

    ReplyDelete
  39. Dear VP,
    Any thoughts on Ashok Alco chem?
    thanks

    ReplyDelete
  40. Please share your view on vinati organics sir

    ReplyDelete
    Replies
    1. Not tracking the companies mentioned in the above few questions.

      Delete
  41. dear vp sir, I have been asking many times about your old recommendation of Dion Global Solutions Ltd which has crashed from rs. 120 to rs. 76, so what do I do. I have been holding on to this share for almost 10 months. Pls reply as I have asked this question many times. Also one suggestion can u make script wise subjects where people can ask question. this way we will not miss out ur answer if answered on the board of other scripts.

    ReplyDelete
    Replies
    1. Before repeating same question again and again , it is always better to check whether the same question answered to someone else in recent past .Please don't insist the question yourself raised should be answered if the question with same meaning answered to someone else in recent past .Check the comment portion of below two postings

      http://value-picks.blogspot.in/2014/11/v2-retail-tcpl-packaging-result-updates.html


      http://value-picks.blogspot.in/2014/11/capital-first-ltd-result-update.html

      Delete
    2. Deepak

      The search on the blog also searches the comments of thread on different stocks. So if VP has answered about a stock on another stock thread then you can find that by using search option.

      GreyCells

      Delete
  42. Sir,
    Could you please share your views on Triton Valves for long term ?

    Thanks in Advance

    ReplyDelete
  43. Sir can I buy ISGEC Heavy eng ltd @5800 levels. Please suggest as I have great faith in you. I have some qty and wanted to add.

    ReplyDelete
    Replies
    1. Company is good , but price moved sharply in recent times.

      Delete
  44. Dear sir,
    can you please let me know your view on 1) MM Forgings 2) Can fin homes 3)Symphony 4) Granules India 5)Indian Hume Pipes.

    ReplyDelete
    Replies
    1. Three stocks - MM ,Canfin. and Granules- already suggested here .

      Not tracking others

      Delete
  45. Dear sir,
    What is your view on Somi Conveyer Beltings Ltd In the context of Modi's Make in India campaign.

    ReplyDelete
  46. respected vp sir i wants to know ur view on intrasoft technologies ?????

    ReplyDelete
  47. Dear sir
    What is your opinion about Freshtrop fruit ?????
    pl. answer sir.

    ReplyDelete
    Replies
    1. Not tracking the companies mentioned in the above few questions.

      Delete
  48. Sir, what is your view on Patels Airtemp?

    ReplyDelete
  49. Hello sir.. What's your view on Basant agro tech it s top line growing on yoy basis... I know this was your recommendation in 2012... What is your current view...

    ReplyDelete
    Replies
    1. If promoters are willing to de-merge its seed business , further wealth creation is possible.

      Delete
  50. Sir..
    Any positive developments with bilcare?
    Sudden rise?

    ReplyDelete
  51. Dear sir, first of all, a very happy new year to you. I wanted to know your views on EID Parry (Murugappa Group). It holds a majority in Coromandel International as well as it is a market leader in sugar. How are its long-term prospects (1-2 yrs) ? Any opinion will be greatly appreciated sir.

    ReplyDelete
    Replies
    1. Because of the lack of a consistent policy , Sugar is a tricky business now .

      I am more interested in its Nutraceuticals and Bio Products divisions.

      Delete
  52. Dear Sir, when you first recommended Granules India Limited a year back, there was one analyst who said loudly on TV that "IT IS CRAZY NOT TO INVEST IN GRANULES INDIA LIMITED". Such was the situation that time. Today everyone is talking about it and saying it is a great company to hold. There are several of such examples of stocks recommended by you. Dear Sir, I owe you my gratitude for your early identification and recommendations of these stocks.

    ReplyDelete
    Replies
    1. That is the fate of our investors. If we suggest a stock at Rs.70 , everyone will look into and talk about its negatives only , but if it happens at Rs.700 , the same people will talk only about its positives.

      Delete
  53. Dear Sir, What your take on Career Point, Kalpataru Power transmisson & Sarla Fiber Ltd.
    If you tracking any above stocks your advice shall be helpful to allocate my funds.
    I thank you for the Alstom India you replied to hold for long term, its paying me 20% upside in 2 months only.

    ReplyDelete
  54. Dear VP
    With the current offloading by the promoters in ACP, though it is an insignificant quantity... do you foresee anything negative? Im into this since your first recommendation and wish to continue even for the next 3 years.
    Thanks & regards

    ReplyDelete
    Replies
    1. It is too early to comment .We cant reach a conclusion at this point . As you are aware ,recently company increased its authorized capital by three crores .It is clear at this point they need funds for expansion , especially for launching new products . They may have plans to issue shares to investors' on a pref basis or so. As per SEBI rules they can issue shares only based on SEBI Formula which can't permit any company to issue shares below the average price of a certain period. Its stock price was on continuous upper circuit in past few weeks .Suppose the investors are willing to take stake only up to a particular price level and the price calculated based on SEBI Formula is above their comfort level , they may not succeed to raise fresh capital .In such a situation , there is no other ways to promoters .

      I just shared only one possibility and we need to wait some more time to understand what promoter is going to do in future.

      Delete
    2. You need a keep a like button for your replies. I liked your detailed reply to Muzaffar Rizvi's question.

      Delete
    3. Company clarification in the below link

      http://www.bseindia.com/corporates/anndet_new.aspx?newsid=4caccac0-86bf-46e4-ae09-e6af09f8aa46

      Delete
    4. Dear vp sir, Mr shilpan patel's act is admirable. He doesn't break "trust" (on which we long term investors thrive).

      Delete
  55. VP sir kindly give in your view regarding lumax auto please. Thanks in advance.

    ReplyDelete
    Replies
    1. Lumax Auto tech is an already listed company

      Delete
  56. Sir today modi ji had flagged off campaign on usage of LED lights for savings on electricity. Can we expect positive impact on MIC due to this

    ReplyDelete
    Replies
    1. Sentimental impact on stock price is possible in near term , further depends on their ability to tap the emerging opportunities . Let us hope for the best.

      Delete
  57. Sir sorry to ask again but then should I book out off isgec heavy or remain invested. Sir please reply regards

    ReplyDelete
    Replies
    1. It depends on your attitude towards investment.

      Delete
  58. VP sir,
    Thank you for all the great work you have been doing to help small investors like me.

    I have a question on Kaveri Seeds:

    currently cotton market in India is almost saturated,Kaveri has been gaining market share in cotton seeds from the existing players,overall cotton market size is not growing but Kaveri was able to grab the market share from others.It has penetrated very well into cotton growing belts like AP,Maharastra,little bit of Gujarat.Future growth from cotton may not be like the past since it has larger base to operate from.
    Now,they are targetting paddy for their next level of growth which is very much underpenerated only 3 million hectares out of 44 million are under hybrid.
    Also,corn can contribute for their growth but tough competition from Monsanto-Maycho,Pioneer.Their past growth rates(30%-35% CAGR) may not be achievable in the future.

    Recently management indicated about their plans to divest and start the food processing center in 1000 hectares at an investment of Rs.1500 crores.

    Considering all these,do you still think it can be bought at these levels for long-term? I am newbie to the market ,your guidance will be much appreciated.

    Thanks for your time.

    ReplyDelete
    Replies
    1. Divesting some stake not means exiting from the company.Already suggested to take out part profit from this company.

      Delete
  59. Hello VP,

    What is your long term view on Flex Foods?

    ReplyDelete
  60. Sir, what is your outlook on Camphor & Allied as the crude falls at 50$ levels ? Is it beneficial or are they reducing product prices too?

    ReplyDelete
  61. Sir
    Whats your view about Sanghi Industries

    ReplyDelete
    Replies
    1. It is not a bad one at this price from the Cement sector.But one need to wait till revival in cement sector which may take some more time.

      Delete
  62. Dear sir, I don't know if this question has been asked, but regarding Jain Irrigation, what is your view on it? It has fallen a lot, will there be a turnaround or are you pessimistic about it? It has its fingers in many pies at the moment, many products and divisions. Fundamentally also, your opinion about it. Thanks for your help towards small investors, sir.

    ReplyDelete
    Replies
    1. Many times explained the same in recent past

      Delete
  63. sir your views on orient bell. thank you.

    ReplyDelete
    Replies
    1. earlier suggested to shift from Orient to Asian Granito when Orient was @ Rs.75 and Asian was around Rs.50. Please refer the last part of below link:

      http://value-picks.blogspot.in/2014/06/asian-granito-ltd-emergence-of-dark.html

      Delete
  64. Sir, with the coming budget in mind, i think the govt will favor agriculture sector, so i am thinking of buying these stocks which i have an eye on since some time, Rallis India (Tata group + fundamentally strong), Advanta (Promoter constantly buying back share since last 2 months), and RCF (because of recent tie-ups and govt. backing).... sir, please give your wisdom-filled views on these. Thanks.

    ReplyDelete
    Replies
    1. Exceptional gain is generally not possible if the entire market expecting same thing.

      Delete
  65. Could your share your view on Action construction equipment?

    ReplyDelete
  66. Sir pls your view on Lawreshwar poly(A footwear company) bse code 532829 @ 24

    ReplyDelete
  67. Dear VP,
    Any thoughts on Akshar Chem? Seems like an undervalued stock with solid ROE, Sales growth and profitability. Its debt has been reducing too. Promoter stake pretty high.
    Thanks for your help
    SH

    ReplyDelete
  68. Dear VP Sir,
    Thanks for interesting article..
    May I know your view about Rajoo Engineers...if you are tracking..
    Thanks
    Kamal

    ReplyDelete
  69. Dear Mr .VP,

    Please give your suggestion on Super crop safe

    ReplyDelete
  70. Dear sir
    AMIPLA going down can I hold or not?

    ReplyDelete
  71. Hello Sir. Now the stock trading at 25. Please suggest to hold or exit.

    ReplyDelete
  72. Sir,

    Thsi stock is currently trading @35, Shall you please suggest can we bought now? and what happen to it form your recommended price to 35?

    ReplyDelete
    Replies
    1. This stock is still trading above 50 % from recommended level. There was a stock split in the ratio of 5:1 post recommendation

      Delete
  73. Sir,

    please suggest, can buy @18 the Amines and plast..

    ReplyDelete
  74. Amines and Plasticizers - is it still a buy @ 22.5 after bonus ?? . pls

    ReplyDelete

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