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Balaji Amines Ltd (BAL)

No. of shares (m) 32.4

Mkt cap (Rs crs/$m) 1325/185.0

Current price (Rs/$) 409/5.7

Price target (Rs/$) 543/7.6

52 W H/L (Rs.) 538/211

Book Value (Rs/$) 197/2.7

Beta 1.2

Daily NSE volume (avg. monthly) 75230

P/BV (FY20e/21e) 2.0/1.7

EV/EBITDA (FY20e/21e) 8.8/6.7

P/E (FY20e/21e) 13.1/10.5

EPS growth (FY19/FY20e/21e)

1.1/-11.3/24.5

OPM (FY19/FY20e/21e) 20.5/18.7/19

ROE (FY19/FY20e/21e) 22.3/16.6/17.7

ROCE(FY19/FY20e/21e) 17.6/13.1/15.9

D/E ratio (FY19/FY20e/21e) 0.4/0.3/0.2

BSE Code 530999

NSE Code BALAMINES

Bloomberg BLA IN

Reuters BAMN.NS

Shareholding pattern%

Promoters 53.6

MFs / Banks / FIs 0.2

Foreign Portfolio Investors 1.6

Govt. Holding 0.0

Public & Others 44.5

Total 100.0

As on December 31, 2019.

Recommendation

BUY

Phone: + 91 (33) 4488 0011

E- mail: [email protected]

Consolidated (Rs crs)

Income from operations

Other Income

EBITDA (other income included)

Consolidated Net Profit EPS(Rs)

EPS growth (%)


ities Distribution of Mutual Funds Dist

FY17

FY18

FY19

670.48 861.23 943.05

5.69 4.67 4.23

158.34 194.16 197.63

80.61 112.77 113.96

24.88 34.80 35.18

6.7 39.9 1.1

Company Brief

Balaji Amines Limited (BAL), one of the leading manufacturers of aliphatic

amines in India specializes in manufacturing of

derivatives of amines and specialty chemicals.

Highlights

• According to an industry report, the global amines market size is

anticipated to reach over USD 33.3 billion by 2026

an increasing number of applications in industries like pharma,

agrochemicals, dyes, etc. and is expected to grow at a stable 5

next few years. The Indian aliphatic amines industry is largely a duopoly

with Balaji Amines (BAL) and Alkyl Amines Chemicals comprising more

than 90% of the market.

• BAL started manufacturing acetonitrile from Nov

capacity of 9000 tons. The domestic demand for a

12000 tons annually. BAL is currently manufacturing ~3000 tons of

acetonitrile (annual run rate) and we expect

40% in FY21. The company has helped start

Balaji Speciality and which should start experiencing meaningful

incremental revenues from FY21.

• BAL has received environmental clearance for 90 acre greenfield project. In

phase I of the greenfield project of Unit IV, the company will instal

capacity for manufacturing 16,500 tonnes of ethylamines and 9,900 tonnes

of di-methyl carbonate (DMC). The capex involved is estimated at Rs 150

to Rs 170 crs, to be completed in FY21. Post phase I project, it would have

ethylamines capacity of 22500 tons.

• The stock currently trades at 13.1x FY20e EPS of Rs

EPS of Rs 38.82. Increased revenues from Balaji Speciality (revenue

potential of Rs. 350-400 cr at peak utilization)

Balaji Amines acetonitrile plant and some new capacities of ethylamines

and amines derivatives will no doubt buoy

earnings is estimated to grow by 24.5% on higher margins and barely

subdued volumes. Yet volatile methanol prices continue to remain a

concern as it could weigh negatively on margins

advise buy rating on the stock with target price of

FY21e EPS of Rs 38.82 over a period of 9-12 months.

Feb 28, 2019

istribution of Life Insurance

FY20e FY21e

926.87 1193.00

4.59 5.16

177.67 231.99

101.04 125.79

31.18 38.82

-11.3 24.5

f the leading manufacturers of aliphatic

of methylamines, ethylamines,

industry report, the global amines market size is

over USD 33.3 billion by 2026. Aliphatic Amines find

pplications in industries like pharma,

yes, etc. and is expected to grow at a stable 5-7% over the

next few years. The Indian aliphatic amines industry is largely a duopoly

with Balaji Amines (BAL) and Alkyl Amines Chemicals comprising more

cetonitrile from November with an installed

. The domestic demand for acetonitrile is around

ly manufacturing ~3000 tons of

we expect capacity utilization at around

helped start commercial production for

should start experiencing meaningful

environmental clearance for 90 acre greenfield project. In

phase I of the greenfield project of Unit IV, the company will install

capacity for manufacturing 16,500 tonnes of ethylamines and 9,900 tonnes

methyl carbonate (DMC). The capex involved is estimated at Rs 150

Post phase I project, it would have

x FY20e EPS of Rs 31.18 and 10.5x FY21e

evenues from Balaji Speciality (revenue

400 cr at peak utilization) along with stabilization of

nd some new capacities of ethylamines

buoy topline next fiscal. Post tax

earnings is estimated to grow by 24.5% on higher margins and barely

volatile methanol prices continue to remain a

it could weigh negatively on margins. Weighing odds, we

rating on the stock with target price of Rs 543 based on 14x

12 months.



Company Overview Balaji Amines Limited, one of the leading manufacturers

ethylamines, amines derivatives, specialty chemicals and pharma e

derivatives, which are downstream products for various p

requirements. World over, amine technology is a closely guarded process with only handful companies having access to such

technology. BAL for the first time in India tested indigenously developed technol

time.

BAL‘s products are accepted in international markets and have gained the distinct export quality status, which makes it one o

the few companies in India having the potential to match the stringent inter

for future growth, the chemicals manufacturer diversified into hospitality business with its maiden opening of 129 room hotel

Solapur, one of the fastest emerging business hubs in Maharashtra. Built

first of its kind in the region and also competes with any other hotel in this segment across major cities.

Segments

Amines and Speciality Chemicals

BAL manufactures amines (methylamines and ethyl a

Overall, the company has a portfolio of over 25 products, which are supplied to domestic and foreign players (exports account

for around 21% of the total sales in FY19). At present

from agrochemical. With an installed capacity of 184500 tonnes per annum

acetonitrile etc. and significant additions to the tune of

revenue over the next few years. Balaji Speciality, a subsidiary of BAL

chemicals of 45000 tonnes.

Hotel Division

Balaji Amines started a 5-star hotel in Solapur in Oct’13 with an investment of Rs 110 cr. It is a 129 room facility. Solapur is

located on major road and rail routes between Mumbai and Hyderabad and is an important hub for pilgrims.

connectivity, it will attract millions of pilgrims a

which will drive corporate traffic. Named as Balaji Sarovar Premier, the hotel

management fee plus nominal revenue sharing ba

Industry

Amines Industry

According to an industry report, the global amines market size is anticipated to reach

personal care segment dominated the global amines industry, in terms of revenue. Asia

global market revenue in 2017. The use of amines in wide applications such as personal care, crop protection, paints and coatings,

surfactants, and beauty products majorly drives the growth of the market. Growing awareness regarding personal care and

increasing disposable income, especially in developing regions, is boosting the overall amines industry growth.

Aliphatic Amines find an increasing number of a

to grow at a stable 5-7% over the next few years. The Indian aliphatic amines industry is largely a duopoly with Balaji Amines

(BAL) and Alkyl Amines Chemicals comprising more than 90% of the market.

pharmaceutical, and construction sectors, among others

two companies – BAL and Alkyl Amines within the industry is varied with each being dominant in specific chemicals. This has

made the industry structure appear closer to being a monopoly for each of the players

imports.

2



f the leading manufacturers of aliphatic amines in India specializes in manufacturing methylamines,

specialty chemicals and pharma excipients. It also has facilities for the manufacture of

ownstream products for various pharma and agrochemical industries apart from user

mine technology is a closely guarded process with only handful companies having access to such

technology. BAL for the first time in India tested indigenously developed technology and developed it further over a period of

BAL‘s products are accepted in international markets and have gained the distinct export quality status, which makes it one o

the few companies in India having the potential to match the stringent international quality standards. Envisaging huge potential

for future growth, the chemicals manufacturer diversified into hospitality business with its maiden opening of 129 room hotel

Solapur, one of the fastest emerging business hubs in Maharashtra. Built at an investment of Rs 110 crore, the five


BAL manufactures amines (methylamines and ethyl amines) and their derivatives, speciality chemicals and pharma excipients.

Overall, the company has a portfolio of over 25 products, which are supplied to domestic and foreign players (exports account

for around 21% of the total sales in FY19). At present, BAL derives over 51% of its revenues from the pharma sector and 26%

. With an installed capacity of 184500 tonnes per annum encompassing ethylamines, methylamines,

and significant additions to the tune of 26400 tonnes on the way, BAL is geared to add significant incremental

Balaji Speciality, a subsidiary of BAL, has invested Rs. 252 cr to

ur in Oct’13 with an investment of Rs 110 cr. It is a 129 room facility. Solapur is

located on major road and rail routes between Mumbai and Hyderabad and is an important hub for pilgrims.

attract millions of pilgrims and tourist every year to Solapur. In addition, various corpo

corporate traffic. Named as Balaji Sarovar Premier, the hotel is being managed for 12 years by Sarovar Group

revenue sharing basis. Sarovar Group is one of India’s most reputed hospitality groups.

industry report, the global amines market size is anticipated to reach over USD 33.3 billion by 2026

personal care segment dominated the global amines industry, in terms of revenue. Asia-Pacific was the leading contributor to the

he use of amines in wide applications such as personal care, crop protection, paints and coatings,


cially in developing regions, is boosting the overall amines industry growth.

Aliphatic Amines find an increasing number of applications in industries like pharma, agrochemicals, d

ver the next few years. The Indian aliphatic amines industry is largely a duopoly with Balaji Amines

(BAL) and Alkyl Amines Chemicals comprising more than 90% of the market. Increasing

among others, augments the growth of amines industry.

within the industry is varied with each being dominant in specific chemicals. This has

made the industry structure appear closer to being a monopoly for each of the players with the key competition being

2


a specializes in manufacturing methylamines,

facilities for the manufacture of

industries apart from user-specific

mine technology is a closely guarded process with only handful companies having access to such

ogy and developed it further over a period of

BAL‘s products are accepted in international markets and have gained the distinct export quality status, which makes it one of

national quality standards. Envisaging huge potential

for future growth, the chemicals manufacturer diversified into hospitality business with its maiden opening of 129 room hotel in

at an investment of Rs 110 crore, the five-star hotel is


mines) and their derivatives, speciality chemicals and pharma excipients.

Overall, the company has a portfolio of over 25 products, which are supplied to domestic and foreign players (exports accounted

, BAL derives over 51% of its revenues from the pharma sector and 26%

encompassing ethylamines, methylamines,

n the way, BAL is geared to add significant incremental

cr to set up capacities of specialty

ur in Oct’13 with an investment of Rs 110 cr. It is a 129 room facility. Solapur is

located on major road and rail routes between Mumbai and Hyderabad and is an important hub for pilgrims. Given its good

nd tourist every year to Solapur. In addition, various corporates are coming up

for 12 years by Sarovar Group on

one of India’s most reputed hospitality groups.

over USD 33.3 billion by 2026. In 2017, the

Pacific was the leading contributor to the

he use of amines in wide applications such as personal care, crop protection, paints and coatings,


cially in developing regions, is boosting the overall amines industry growth.

pplications in industries like pharma, agrochemicals, dyes, etc. and is expected

ver the next few years. The Indian aliphatic amines industry is largely a duopoly with Balaji Amines

Increasing demand of amines from

The product portfolio of these

within the industry is varied with each being dominant in specific chemicals. This has

with the key competition being only



The size of aliphatic amines industry globally

catering to the majority of demand in a region. Globally, ~61% of aliphatic amines and amine

the pharmaceutical sector, 26% gets consumed in the agrochemicals industry and the rest finds application in other industries

The consumable nature of demand and the oligopolistic nature of the industry results in a strong correlation between r

growth of aliphatic amines and that of end-user industries.

Aliphatic amines are hazardous in nature when not handled with

threat of imports. Specialized vehicles are required for movement o

they can be transported. As a result, consumers prefer to source locally.

prefer to work with only 2-3 credible suppliers. Only 5% of the I

Secondly, freight is a big element of cost, which makes imports

chemical, which prevents high inventory levels, force customers to

Speciality Chemical Industry

Global specialty chemicals market size was valued at $211.2 billion in 2018, and is expected to reach $316.5

registering a CAGR of 5.2% during the analysis period

chemicals are manufactured for specific performance and functions in different end use industries.

emerging economies is driving public infrastructure and housing projects

specialty construction chemicals such as protective coatings, adhesives and sealants, concrete admixtures, and asphalt additi

The construction chemicals industry is booming in emerging economies such as Asia

and South America. Water treatment chemical is projected to be one of the fastest growing segments during the forecast period.

Stringent government regulations for proper utilization of water compel industries and munic

treatment solutions, which in turn is fueling the demand for water treatment chemicals.

Source: Allied Market Research

3



mines industry globally is $4.1 billion. Globally, the amine industry is oligopolistic with

catering to the majority of demand in a region. Globally, ~61% of aliphatic amines and amine-based chemicals get c

the pharmaceutical sector, 26% gets consumed in the agrochemicals industry and the rest finds application in other industries

The consumable nature of demand and the oligopolistic nature of the industry results in a strong correlation between r

user industries.

c amines are hazardous in nature when not handled with proper safety during transporta

ed vehicles are required for movement of these chemicals which restricts the distances over which

be transported. As a result, consumers prefer to source locally. Moreover, safety is a criti

3 credible suppliers. Only 5% of the Indian demand for methyl amines is catered by imports.

Secondly, freight is a big element of cost, which makes imports uncompetitive. High shipping cost and hazardous nature of the

chemical, which prevents high inventory levels, force customers to source locally rather than import it.

pecialty chemicals market size was valued at $211.2 billion in 2018, and is expected to reach $316.5

registering a CAGR of 5.2% during the analysis period according to an industry report published in December

chemicals are manufactured for specific performance and functions in different end use industries.

emerging economies is driving public infrastructure and housing projects, which in turn has increased the consumption of

specialty construction chemicals such as protective coatings, adhesives and sealants, concrete admixtures, and asphalt additi

The construction chemicals industry is booming in emerging economies such as Asia-Pacific, the Middle East, Africa, Central

Water treatment chemical is projected to be one of the fastest growing segments during the forecast period.

Stringent government regulations for proper utilization of water compel industries and municipal corporations to adopt water

treatment solutions, which in turn is fueling the demand for water treatment chemicals.

3


mine industry is oligopolistic with few producers

based chemicals get consumed in

the pharmaceutical sector, 26% gets consumed in the agrochemicals industry and the rest finds application in other industries.

The consumable nature of demand and the oligopolistic nature of the industry results in a strong correlation between revenue

proper safety during transportation and so it reduces the

these chemicals which restricts the distances over which

cal factor and hence end-users

demand for methyl amines is catered by imports.

ve. High shipping cost and hazardous nature of the

cally rather than import it.

pecialty chemicals market size was valued at $211.2 billion in 2018, and is expected to reach $316.5 billion by 2026,

dustry report published in December. Specialty

chemicals are manufactured for specific performance and functions in different end use industries. Increasing urbanization in

turn has increased the consumption of

specialty construction chemicals such as protective coatings, adhesives and sealants, concrete admixtures, and asphalt additives.

c, the Middle East, Africa, Central

Water treatment chemical is projected to be one of the fastest growing segments during the forecast period.

ipal corporations to adopt water



Historically, developed regions such as North America, Europe, and Japan were the major consu

However, now the trend has shifted and in 2018, the Asia

the market share and would continue to consolidate its position throughout the forecast period.

chemicals in the Asia-Pacific market is primarily attributed

Taiwan. Rapid industrialization in the Asia-Pacific region is supplemented by trade liberalization, the spr

technology, low labor cost, and high economic growth.

Aided by high entry barriers, specialty chemicals are a group of “relatively high

end-use performance-enhancing applications”. Generally, the ma

thus making the business more attractive along with the fact that very few companies are into this business most of whom are

involved in different products. Recently published report by Maier

India at $24.9 bn with a potential to grow at 13

agro chemicals etc; specialty chemicals constituted

End-User Industry Growth - Pharma

In March 2017, the Government of India approved the National Health Policy 2017

coverage and delivering affordable and quality healthcare services to all. The p

engagement with the private sector to fill critical gaps in achieving national goals. It envisages private sector collaborati

strategic purchasing, capacity building, skill development programs, awareness gene

for the community to strengthen mental health services and disaster management. The policy proposes to raise public health

expenditure to 2.5% of the GDP by 2025.

In December, Indian rating agency- ICRA projected th

maintaining a stable outlook on the sector. The optimism is driven by the Indian government's thrust on universal healthcare

through Ayushman Bharat and an increasing number of middle

ability of private payers to attract global patients. The domestic pharmaceutical industry has gained adequate scale and gene

drug development capabilities over a decade of growth will keep them in goo

in the specialty/niche segments in the regulated market,

The global pharmaceutical market will exceed $1.5 trillion by 2023 growing at a 3

next five years according to the latest report published by IQVIA

United States and emerging markets with 4−7% and 5

spending growth is driven by a range of factors including new product uptake and brand pricing, while it is offset by patent

expiries and generics.

4



Historically, developed regions such as North America, Europe, and Japan were the major consu

shifted and in 2018, the Asia-Pacific region dominated the market, accounting for more than 38% of

consolidate its position throughout the forecast period.

Pacific market is primarily attributed to rapid industrialization in India, China, Japan, South Korea, and

Pacific region is supplemented by trade liberalization, the spr

technology, low labor cost, and high economic growth.

chemicals are a group of “relatively high-value low volume chemicals, known for its

enhancing applications”. Generally, the margins for specialty chemicals are higher than basic chemicals


involved in different products. Recently published report by Maier-Vidorno estimates the size of specialty

India at $24.9 bn with a potential to grow at 13-14% every year. Some of the key products driving

hemicals constituted over 40% of BAL revenues in Q3FY20.

n March 2017, the Government of India approved the National Health Policy 2017 which aims at achieving universal health

coverage and delivering affordable and quality healthcare services to all. The policy advocates a positive and proactive

engagement with the private sector to fill critical gaps in achieving national goals. It envisages private sector collaborati

strategic purchasing, capacity building, skill development programs, awareness generation, developing sustainable networks


ICRA projected the Indian pharma industry to grow at 10


through Ayushman Bharat and an increasing number of middle-class seeking quality and affordable healthcare, along with the

ability of private payers to attract global patients. The domestic pharmaceutical industry has gained adequate scale and gene

drug development capabilities over a decade of growth will keep them in good stead to capture bigger opportunities, especially

/niche segments in the regulated market, according to ICRA.

The global pharmaceutical market will exceed $1.5 trillion by 2023 growing at a 3−6% compound annual growth rate over the

according to the latest report published by IQVIA. The key markets driving growth

−7% and 5–8% compound annual growth respectively. In the United States, overall


4


Historically, developed regions such as North America, Europe, and Japan were the major consumers of specialty chemicals.

Pacific region dominated the market, accounting for more than 38% of

consolidate its position throughout the forecast period. The demand for specialty

rapid industrialization in India, China, Japan, South Korea, and

Pacific region is supplemented by trade liberalization, the spread of process

value low volume chemicals, known for its

chemicals are higher than basic chemicals


specialty chemicals industry in

products driving growth are water chemicals,

aims at achieving universal health

olicy advocates a positive and proactive

engagement with the private sector to fill critical gaps in achieving national goals. It envisages private sector collaboration for

ration, developing sustainable networks


e Indian pharma industry to grow at 10-12% up to FY22 while


g quality and affordable healthcare, along with the

ability of private payers to attract global patients. The domestic pharmaceutical industry has gained adequate scale and generic

d stead to capture bigger opportunities, especially

−6% compound annual growth rate over the

growth will continue to be the

8% compound annual growth respectively. In the United States, overall




Investment Thesis

Balaji Speciality Chemicals

Balaji Speciality Chemicals Private Limited was incorporated in 2010. The company had all necessary approvals in place to beg

operations and hence BAL acquired a 55% stake in Balaji Speciality Chemi

was funded through internal accruals and unutilised working capital limits, has enabled BAL to add new products that are in

demand in both domestic and export markets to its portfolio. Balaji Special

chemicals such as ethylenediamine (EDA; 37350 tonnes per annum (TPA)), piperazine (about 4050 TPA) and diethylenetriamine

(DETA; about 3150 TPA). BSC has incurred capex of about Rs. 252

level as per management estimates) for the project. The management expects the subsidiary to

FY21; though the same could be affected by hurdles

Backward Integration

Cost optimization coupled with regular supply of

integration strategy. Higher margins in derivatives have prompted Balaji Amines to set

25000 tons), DMF (30000 tons), DMC (upcoming capacity

and GBL). Yet, unsettling variations in prices of key raw materials

products spreads. Ability to source methanol (majorly imported in India) at attractive prices give BAL an added advantage in

the production of derivatives for some of which, it is the sole manufacturer in India.

Capex

On the back of strong conviction to increase revenues, BAL increased capacities for a basket of products: In November, it started

production of acetonitrile with an installed capacity of 9000 tons currently and approval to increase the capacity by another 9000

in the future. The plant will also be able to manufacture TH

margins. In FY19 BAL started manufacturing m

India.

BAL has received the environmental clearance for 90 acre g

company will install capacity for manufacturing 16,500 tonnes of ethylamines and 9,900 tonnes of di

The capex involved is estimated at Rs 150 to Rs 170 crs, which will be largely funded by internal accruals.

phase I of the greenfield project unit IV will be completed in FY

will have the largest installed capacity of ethyla

5



Balaji Speciality Chemicals Private Limited was incorporated in 2010. The company had all necessary approvals in place to beg

BAL acquired a 55% stake in Balaji Speciality Chemicals (BSC) in FY18 for Rs. 66 cr. The acquisition, which


rt markets to its portfolio. Balaji Speciality has set up a plant to manufacture


incurred capex of about Rs. 252 cr (with revenue potential of Rs. 350

) for the project. The management expects the subsidiary to report production of

the same could be affected by hurdles in ramping commercial production and courting new clients

Cost optimization coupled with regular supply of methyl amines has been one of the cornerstones of Balaji Amines’ backward

integration strategy. Higher margins in derivatives have prompted Balaji Amines to set up capacities of DMAHCL (capacity of

25000 tons), DMF (30000 tons), DMC (upcoming capacity – 9900 tons) and NMP (33000 tons; combined capacity with 2P/NEP

and GBL). Yet, unsettling variations in prices of key raw materials – methanol, ammonia etc. perils


the production of derivatives for some of which, it is the sole manufacturer in India.

of strong conviction to increase revenues, BAL increased capacities for a basket of products: In November, it started

cetonitrile with an installed capacity of 9000 tons currently and approval to increase the capacity by another 9000

future. The plant will also be able to manufacture THF in the same line. What make acetonitrile attractive too is higher

FY19 BAL started manufacturing morpholine, with a capacity of 10000 tons for which it is the only producer in

onmental clearance for 90 acre greenfield project. In phase I of the greenfield project of Unit IV, the

manufacturing 16,500 tonnes of ethylamines and 9,900 tonnes of di

pex involved is estimated at Rs 150 to Rs 170 crs, which will be largely funded by internal accruals.

nit IV will be completed in FY21. Post the commencement of the phase I project, the company

largest installed capacity of ethylamines in India at 22,500 tonnes per annum.

5


Balaji Speciality Chemicals Private Limited was incorporated in 2010. The company had all necessary approvals in place to begin

cals (BSC) in FY18 for Rs. 66 cr. The acquisition, which


has set up a plant to manufacture specialty


ntial of Rs. 350-400 cr at peak utilization

report production of 20000 tons in

nd courting new clients.

methyl amines has been one of the cornerstones of Balaji Amines’ backward

up capacities of DMAHCL (capacity of

9900 tons) and NMP (33000 tons; combined capacity with 2P/NEP

methanol, ammonia etc. perils perpetuating derivative


of strong conviction to increase revenues, BAL increased capacities for a basket of products: In November, it started

cetonitrile with an installed capacity of 9000 tons currently and approval to increase the capacity by another 9000

cetonitrile attractive too is higher

orpholine, with a capacity of 10000 tons for which it is the only producer in

reenfield project of Unit IV, the

manufacturing 16,500 tonnes of ethylamines and 9,900 tonnes of di-methyl carbonate (DMC).

pex involved is estimated at Rs 150 to Rs 170 crs, which will be largely funded by internal accruals. The construction for

21. Post the commencement of the phase I project, the company



This project has received Mega Project status from Gov

install capacity of 16500 tonnes of manufacturing of fungible products of IPA

amine), However with another Indian company entering the market with the same products they change

manufacture di-methyl carbonate (DMC). The demand

met fully by imports.

Balaji Speciality undertook capex of Rs. 252 crores

29,000 tons of ethylenediamine (EDA) which goes into end

major consumers of EDA. The other two products

etc. Balaji Specialty will be the only company in India manufacturing EDA, PIP and DETA. India is importing 7,000 to 8,000 tons

of PIP and 3,000 to 4,000 tons of DETA. These two products have good export opportunity as well.

Financials and Valuation

Lower raw material costs triggered by subdued

December 2019. This was despite the increase in volumes of 7.6

Ammonia, methanol and denatured ethyl alcohol

aliphatic amines such as methylamine and ethylamine. Methanol is primarily imported from Middle East countries like Saudi

Arabia. While prices of ethyl alcohol are relatively more stable,

passes on any volatility in raw material prices to end consumers. With

expanding into higher derivatives and speciality chemicals.

Despite just a tepid rise in revenues (Rs. 15.87 cr in 9MFY20 vs Rs. 15.67 cr in 9MFY19) from hotel division, it managed to turn a

profit (though insubstantial) in the same period.

average revenue per room stood at Rs. 3,610 and revenue per available room was Rs. 2,177. The

stood at 60.3%.

6



This project has received Mega Project status from Government of Maharashtra. In the greenfield project, earlier plan was to

of manufacturing of fungible products of IPA (isopropyl alcohol)

, However with another Indian company entering the market with the same products they change

methyl carbonate (DMC). The demand for di-methyl carbonate is about 8,000 tonnes in India, which is currently

rores and has also got mega project status for the same. India is curr

goes into end-user industry of agrochemicals. UPL, Coromandel and Indofil are

major consumers of EDA. The other two products- piprazine and di-ethyl-triamine go into pharmaceuticals, polymers, coatings,

ly company in India manufacturing EDA, PIP and DETA. India is importing 7,000 to 8,000 tons

of PIP and 3,000 to 4,000 tons of DETA. These two products have good export opportunity as well.

dued crude oil prices stoked revenues which fell by 5.2% for nine months end

e the increase in volumes of 7.6% (standalone) taking the absolute volumes to 62686 tons.

Ammonia, methanol and denatured ethyl alcohol, BDO, acetic acid and BEG are the key raw materials used to manufacture


prices of ethyl alcohol are relatively more stable, methanol has historically been volatile

passes on any volatility in raw material prices to end consumers. With greater scope for product

expanding into higher derivatives and speciality chemicals.

pid rise in revenues (Rs. 15.87 cr in 9MFY20 vs Rs. 15.67 cr in 9MFY19) from hotel division, it managed to turn a

in the same period. Hotel business constituted about 2.2% of total revenue in Q3 FY2020. The

room stood at Rs. 3,610 and revenue per available room was Rs. 2,177. The

6


reenfield project, earlier plan was to

(isopropyl alcohol) or MIPA (mono isopropyl

, However with another Indian company entering the market with the same products they changed plans to instead

arbonate is about 8,000 tonnes in India, which is currently

roject status for the same. India is currently importing

grochemicals. UPL, Coromandel and Indofil are

go into pharmaceuticals, polymers, coatings,

ly company in India manufacturing EDA, PIP and DETA. India is importing 7,000 to 8,000 tons

revenues which fell by 5.2% for nine months ended

taking the absolute volumes to 62686 tons.

raw materials used to manufacture


historically been volatile – however, the company

scope for product basket expansion, BAL is

pid rise in revenues (Rs. 15.87 cr in 9MFY20 vs Rs. 15.67 cr in 9MFY19) from hotel division, it managed to turn a

business constituted about 2.2% of total revenue in Q3 FY2020. The

occupancy rate in Q3 FY2020



BAL generally negotiates 1-3 month contracts wit

supplies (just in time) as they are the sole suppliers in India for majority of products and have developed their own technology

for some of them. They are in the process of negotiating contracts with industry players for Balaji Speciality and should s

meaningful dispatches from April 2020. This is partly due to the customers having existing contracts up to March ’20 from

imports.

DMF, for which the company made an application to GOI, for levying anti dumping duties, witnessed better pricing thereby

increasing the viability of production. Currently, the utilization is around 20% which is expecte

(capacity of 30000 tons). Acetonitrile plant which was started in November is manufacturing 8 tons per day currently with a

capacity of 9000 tons annually. Better realizations make acetonitrile attractive

tons annually for FY21. Continued elevated prices could tempt the management to

going forward by another 9000 tons for which it has already received approval

the end of next fiscal. With regards to ethylamines capacity expansion of 16500 tons, BAL plans to substitute import and also

export a portion of production.

The stock currently trades at 13.1x FY20e EPS of Rs

growing demand for speciality chemicals should bode well for the company Increases in capacity wi

increases in FY21 by a massive 29% and have a positive impact on margins (Op

19% in FY21). Yet, demand stress in overseas automobile and agrochemical markets has the potential to disrupt

chemical volumes. Effect of COVID-19 on global chemical market is yet to be fully ascertained.

rating on the stock with target price of Rs 543 based on

Risks and Concerns

Sharp changes in raw material prices could adversely impact profitability

With almost 2/3rd of its revenues arising from

Although the company has entered into price-linked contracts to hedge against methanol price fluctuations, any major volatility

could dampen gross margins to some extent.

Slow down in user industry growth

Slowdown in growth of user industry such as pharmaceuticals, agrochemicals etc. could impact th

– Over 50% of its revenues come from the pharmaceuticals sector.

Regulatory concerns

Since all expansion plans of chemical companies are pre

stance or in environmental norms could impact BAL adversely.

7



3 month contracts with their clients and has created a competitive advantage for

suppliers in India for majority of products and have developed their own technology

for some of them. They are in the process of negotiating contracts with industry players for Balaji Speciality and should s

This is partly due to the customers having existing contracts up to March ’20 from


increasing the viability of production. Currently, the utilization is around 20% which is expected to gradually improve to 65%

apacity of 30000 tons). Acetonitrile plant which was started in November is manufacturing 8 tons per day currently with a

city of 9000 tons annually. Better realizations make acetonitrile attractive and we expect acetonitrile production around 4

FY21. Continued elevated prices could tempt the management to vigorously increase capacity for acetonitrile

ng forward by another 9000 tons for which it has already received approval - though it is not expected to materialize before

mines capacity expansion of 16500 tons, BAL plans to substitute import and also

x FY20e EPS of Rs 31.18 and 10.5x FY21e EPS of Rs 38.82. Improving industry outlook and

growing demand for speciality chemicals should bode well for the company Increases in capacity wi

% and have a positive impact on margins (Operating margin to jump from 18.

Yet, demand stress in overseas automobile and agrochemical markets has the potential to disrupt

19 on global chemical market is yet to be fully ascertained. Weighing odds, we advise buy

based on 14x FY21e EPS of Rs 38.82 over a period of 9

Sharp changes in raw material prices could adversely impact profitability

2/3rd of its revenues arising from basic amines and derivatives, BAL’s exposure to methanol prices is significant.

linked contracts to hedge against methanol price fluctuations, any major volatility

user industry such as pharmaceuticals, agrochemicals etc. could impact th

Over 50% of its revenues come from the pharmaceuticals sector.

e all expansion plans of chemical companies are pre-approved for environmental clearances, any changes in the regulatory

nvironmental norms could impact BAL adversely.

7


created a competitive advantage for themselves with fast

suppliers in India for majority of products and have developed their own technology

for some of them. They are in the process of negotiating contracts with industry players for Balaji Speciality and should start

This is partly due to the customers having existing contracts up to March ’20 from


d to gradually improve to 65%

apacity of 30000 tons). Acetonitrile plant which was started in November is manufacturing 8 tons per day currently with a

and we expect acetonitrile production around 4000

increase capacity for acetonitrile

though it is not expected to materialize before

mines capacity expansion of 16500 tons, BAL plans to substitute import and also

. Improving industry outlook and

growing demand for speciality chemicals should bode well for the company Increases in capacity will accentuate revenue

erating margin to jump from 18.7% in FY20 to

Yet, demand stress in overseas automobile and agrochemical markets has the potential to disrupt specialty

Weighing odds, we advise buy

over a period of 9-12 months.

and derivatives, BAL’s exposure to methanol prices is significant.

linked contracts to hedge against methanol price fluctuations, any major volatility

user industry such as pharmaceuticals, agrochemicals etc. could impact the overall growth for the sector

approved for environmental clearances, any changes in the regulatory



Cross Sectional Analysis

Company Equity* CMP MCAP* Sales*

Balaji Amines 6 409 1325 906

Alkyl Amines 10 1511 3082 996 *figures in crores; calculations on ttm basis

Despite the difficult macro environment, Alkyl Amines Chemicals Ltd (AACL) reported revenue growth of 24.5% for nine months

ended Dec 2019 on the back of robust growth in volumes. The operating margin jumped 450 bps y

better product mix, strong volume growth and not marginal

half of FY20 while the methylamines capacity utilization had been in the range of 80% in

They also have plans to debottleneck the methylamines plant which will add another 15000 tonnes taking the overall capacity t

45000 tonnes; total capex for FY20 is expected to be around Rs. 80

derivatives and speciality segments along with some maintenance capex on Dahej and Kurkmbh plant.

sector volumes to remain healthy over the next 2 years\

8



Sales* Profit* OPM (%) NPM (%) Int Cov ROE (%)

97 19.0 10.0 7.5 16.3

159 23.0 15.4 17.7 36.5


wth in volumes. The operating margin jumped 450 bps y-o

not marginal fall in raw material prices. Volume growth was 15% during the first

tilization had been in the range of 80% in H1FY20 in comparison

They also have plans to debottleneck the methylamines plant which will add another 15000 tonnes taking the overall capacity t

ed to be around Rs. 80-90 cr and Rs. 100 cr (approx) next year mainly spent on

derivatives and speciality segments along with some maintenance capex on Dahej and Kurkmbh plant.

sector volumes to remain healthy over the next 2 years- volume growth expected to be in the 10-15% range

8


ROE (%) Mcap/Sales P/BV P/E

16.3 1.5 2.1 13.7

36.5 3.1 6.3 19.4


o-y to 25% in 9MFY20 aided by

. Volume growth was 15% during the first

comparison to 70% last fiscal.

They also have plans to debottleneck the methylamines plant which will add another 15000 tonnes taking the overall capacity to

90 cr and Rs. 100 cr (approx) next year mainly spent on

derivatives and speciality segments along with some maintenance capex on Dahej and Kurkmbh plant. AACL expects pharma

15% range over next 2 years.



Financials Consolidated Quarterly Results

Q3FY20

Income From Operations 227.52

Other Income 0.59

Total Income 228.10

Total Expenditure 184.68

EBITDA (other income included) 43.4

Interest 6.31

Depreciation 7.96

PBT 29.15

Tax 8.46

PAT 20.69

Minority Interest -2.72

PAT after Minority Interest 23.41

EO -

Adjusted Net Profit 23.41

EPS(Rs) 7.22

Segment Results Q3FY

Segment Revenue

Amines & Speciality Chemicals 232.61

Hotel Division 4.94

CFL lamps & Capsules 0.00

Inter segmental elimination 10.04


Segment EBIT


Hotel Division -0.33

CFL lamps & Capsules -0.39

Total 35.46

Interest


Hotel Division 0.04

CFL lamps & Capsules 0.00

Total 6.31

PBT


Hotel Division -0.37

CFL lamps & Capsules -0.39

Total 29.15

9



Consolidated Quarterly Results Figures in Rs crs

Q3FY20 Q3FY19 % chg. 9MFY20 9MFY19

227.52 238.81 -4.7 677.75 715.04

0.59 1.15 -48.8 3.46 3.46

228.10 239.96 -4.9 681.20 718.50

184.68 196.22 -5.9 552.63 568.99

43.43 43.74 -0.7 128.57 149.52

6.31 3.52 79.2 16.74 9.75

7.96 4.72 68.9 21.50 14.16

29.15 35.50 -17.9 90.33 125.61

8.46 9.23 -8.3 22.42 34.53

20.69 26.27 -21.3 67.91 91.08

2.72 - - -6.07 -

23.41 26.27 -10.9 73.98 91.08

- - - -

23.41 26.27 -10.9 73.98 91.08

7.22 8.11 -10.9 22.83 28.11

Figures in Rs crs

Q3FY20 Q3FY19 % chg 9MFY20 9MFY19 % chg

232.61 232.98 -0.2 693.70 699.59

4.94 5.69 -13.1 15.87 15.67

0.00 0.00 - 0.00 0.00

10.04 -0.15 -6752.2 31.82 0.22 14438.5

227.52 238.81 -4.7 677.75 715.04

36.18 39.31 -8.0 108.22 136.73 -

0.33 0.09 -461.9 0.01 -0.26 -

0.39 -0.37 4.7 -1.16 -1.11

35.46 39.03 -9.1 107.07 135.36 -

6.27 3.30 89.8 16.62 9.03

0.04 0.22 -80.4 0.12 0.73 -

0.00 0.00 - 0.00 0.00

6.31 3.52 79.2 16.74 9.75

29.91 36.00 -16.9 91.60 127.70 -

0.37 -0.13 189.3 -0.11 -0.98 -

0.39 -0.37 4.7 -1.16 -1.11

29.15 35.50 -17.9 90.33 125.61 -

9


Figures in Rs crs

% chg.

-5.2

-0.1

-5.2

-2.9

-14.0

71.6

51.9

-28.1

-35.1

-25.4

-

-18.8

-

-18.8

-18.8

Figures in Rs crs

% chg

-0.8

1.2

-

14438.5

-5.2

-20.9

103.8

4.5

-20.9

84.1

-83.0

-

71.6

-28.3

-88.4

4.5

-28.1



Consolidated Income Statement FY17


Growth (%)

Other Income 5.69

Total Income 676.17

Total Expenditure 517.83

EBITDA (other income included) 158.34

Interest 12.94

Depreciation 19.71

PBT 125.70

Tax 43.34

PAT 82.35

Minority Interest 0.00

PAT after Minority Interest 82.35

EO 1.74

Adjusted Net Profit 80.61

EPS (Rs) 24.88

Segment Results

Segment Revenue

Amines & Speciality Chemicals

Hotel Division

CFL lamps & Capsules

Inter segmental elimination

Income From Operations

Segment EBIT


Hotel Division


Total

Interest


Hotel Division


Total

PBT


Hotel Division


Total

10



Consolidated Income Statement Figures in Rs crs

FY17 FY18 FY19 FY20e FY21e

670.48 861.23 943.05 926.87 1193.00

4.3 28.4 9.5 -1.7 28.7

5.69 4.67 4.23 4.59 5.16

676.17 865.91 947.28 931.46 1198.15

517.83 671.74 749.64 753.80 966.16

158.34 194.16 197.64 177.67 231.99

12.94 9.04 13.03 23.22 21.34

19.71 19.29 19.55 30.11 36.54

125.70 165.84 165.06 124.33 174.11

43.34 52.66 47.97 31.29 43.82

82.35 113.18 117.09 93.04 130.29

0.00 0.00 -0.44 -8.00 4.50

82.35 113.18 117.53 101.04 125.79

1.74 0.41 3.56 - -

80.61 112.77 113.97 101.04 125.79

24.88 34.80 35.18 31.18 38.82

Figures in Rs crs

FY18 FY19

857.03 928.99

19.35 21.25

0.84 0.02

0.22 7.21

877.00 943.05

177.38 179.66

-0.33 -0.02

-2.77 -1.56

174.28 178.08

7.64 12.19

1.40 0.83

0.00 0.00

9.04 13.03

169.74 167.47

-1.73 -0.85

-2.77 -1.56

165.24 165.06

10




Consolidated Balance Sheet

Sources of Funds

Share Capital

Reserves

Total Shareholders' Funds

Minority Interest

Long Term Debt

Total Liabilities

Application of Funds

Gross Block

Less: Accumulated Depreciation

Net Block

Capital Work in Progress

Investments

Current Assets, Loans & Advances

Inventory

Trade receivables

Cash and Bank

Short term loans (inc. OCA)

Total CA

Current Liabilities

Provisions-Short term

Total Current Liabilities

Net Current Assets

Net Deferred Tax Liability

Net long term assets ( net of liabilities)

Total Assets

11



Figures in Rs crs


6.48 6.48 6.48 6.48 6.48

355.98 460.58 567.53 645.91 771.70

362.46 467.06 574.01 652.39 778.18

0.00 18.00 18.00 10.00 14.50

16.81 42.49 83.33 63.33 43.33

379.28 527.55 675.34 725.73 836.01

461.75 479.10 501.88 771.34 921.34

136.26 163.04 182.14 212.25 248.79

325.48 316.06 319.75 559.09 672.55

25.08 123.13 269.46 70.00 20.00

0.02 0.01 0.00 0.00 0.00

98.98 89.10 163.15 126.44 158.05

124.29 172.68 167.22 160.00 192.00

3.49 24.16 20.57 23.60 22.47

52.79 68.78 98.63 88.80 99.31

279.55 354.72 449.57 398.85 471.84

182.82 234.75 285.84 221.91 243.68

16.27 21.98 22.59 24.83 26.35

199.09 256.73 308.43 246.74 270.03

80.45 97.99 141.15 152.11 201.81

-50.82 -50.22 -45.75 -50.14 -55.28

-0.94 40.59 -9.26 -5.34 -3.07

379.28 527.55 675.34 725.73 836.01

11


Figures in Rs crs

FY21e

771.70

778.18

836.01

921.34

248.79

672.55

158.05

192.00

471.84

243.68

270.03

201.81

55.28

836.01



Key Financial Ratios FY17

Growth Ratios(%)

Revenue 4.3

EBITDA 20.2

Net Profit 39.9

EPS 39.9

Margins (%)

Operating Profit Margin 22.8

Gross profit Margin 21.3

Net Profit Margin 12.0

Return (%)

ROCE 19.5

ROE 25.4

Valuations

Market Cap/ Sales 1.8

EV/EBITDA 8.5

P/E 15.2

P/BV 3.5

Other Ratios

Interest Coverage 10.5

Debt Equity 0.3

Net Debt-Equity Ratio 0.3

Current Ratio 1.3

Turnover Ratios

Fixed Asset Turnover 2.0

Total Asset Turnover 1.9

Inventory Turnover 5.9

Debtors Turnover 5.4

Creditor Turnover 10.0

WC Ratios

Inventory Days 62.4

Debtor Days 67.7

Creditor Days 36.4

Cash Conversion Cycle 93.7

12




4.3 28.4 9.5 -1.7 28.7

20.2 24.3 2.1 -10.1 30.6

39.9 39.9 1.1 -11.3 24.5

39.9 39.9 1.1 -11.3 24.5

22.8 22.0 20.5 18.7 19.0

21.3 21.4 19.6 16.7 17.7

12.0 13.1 12.0 10.0 10.9

19.5 21.9 17.6 13.1 15.9

25.4 27.8 22.3 16.6 17.7

1.8 2.1 1.7 1.4 1.1

8.5 10.1 9.2 8.8 6.7

15.2 16.1 14.1 13.1 10.5

3.5 4.0 2.9 2.0 1.7

10.5 19.3 13.7 6.4 9.2

0.3 0.3 0.4 0.3 0.2

0.3 0.3 0.4 0.3 0.2

1.3 1.3 1.4 1.6 1.7

2.0 2.7 3.0 2.1 1.9

1.9 1.9 1.6 1.3 1.5

5.9 7.1 5.9 5.2 6.8

5.4 5.8 5.5 5.7 6.8

10.0 10.9 9.5 11.1 17.6

62.4 51.1 61.4 70.1 53.7

67.7 62.9 65.8 64.4 53.8

36.4 33.5 38.2 32.7 20.8

93.7 80.5 88.9 101.8 86.8

12




Cumulative Financial Data Figures in Rs crs

Income from operations

Operating profit

EBIT

PBT

PAT

Dividends** OPM (%)

NPM (%)

Interest coverage

ROE (%)

ROCE (%)

Debt-Equity*

Fixed asset turnover

Debtors turnover

Inventory turnover

Creditors turnover

Debtor days

Inventory days

Creditor days

Cash conversion

Dividend payout ratio (%) FY16-18 implies three year period ending fiscal 18 *as on terminal year **includes CDT

BAL has consistently improved its margins (o

(bar FY19) through quality control efficiencies

declined from 58.1% in FY15 to 53.9% in FY18) and favourable pricing contracts. This has had a positive impact on their retur

ratios (ROE improved from 22.7% in FY16 to 27.8% in FY18). Methyl amines, one of the major revenue generators

over FY16-18, requires methanol which is majorly imported. Beneficial costing in methanol sourcing is an added advantage.

Going forward, with the launch of new products (di

expansion activities (ethyl amines) and growing demand for special

increase over 40% in FY19-21e (see table). Robust

the company’s low outstanding debt. Operating margins are expected to

due to not so robust volume growth while the net profit margin is expected to

Return on capital - ROE is expected to slide to 18.6% in

to NPM suppression and barely robust fixed asset turnover.

13



FY16-18 FY19-21e

2175 3063

469 593

420 521

376 463

251 341

27 34

21.6 19.4

11.5 11.0

9.5 9.0

24.4 18.6

16.8 16.0

0.3 0.2

2.2 2.1

5.0 5.6

5.6 6.7

9.5 12.5

73.5 65.2

64.7 54.8

38.3 29.2

99.9 90.7

10.5 9.8

istently improved its margins (operating margins at 22% in FY18 in comparison to 16.5% in FY15) over the years

quality control efficiencies, competitive raw material sourcing (raw material as a

from 58.1% in FY15 to 53.9% in FY18) and favourable pricing contracts. This has had a positive impact on their retur

% in FY16 to 27.8% in FY18). Methyl amines, one of the major revenue generators

18, requires methanol which is majorly imported. Beneficial costing in methanol sourcing is an added advantage.

Going forward, with the launch of new products (di-methyl carbonate, ethylenediamine, PIP and DETA), significant

and growing demand for specialty chemicals, cumulative revenues are expected to

Robust interest coverage ratio for the forecast period of FY19

perating margins are expected to be mildly below the 20% region for FY19

while the net profit margin is expected to decline tepidly as well over the same period.

slide to 18.6% in FY19-21e from 24.4% – would be anything but elevated not least due

to NPM suppression and barely robust fixed asset turnover.

13


to 16.5% in FY15) over the years

aw material as a component of sales

from 58.1% in FY15 to 53.9% in FY18) and favourable pricing contracts. This has had a positive impact on their return

% in FY16 to 27.8% in FY18). Methyl amines, one of the major revenue generators for BAL

18, requires methanol which is majorly imported. Beneficial costing in methanol sourcing is an added advantage.

methyl carbonate, ethylenediamine, PIP and DETA), significant

ty chemicals, cumulative revenues are expected to

interest coverage ratio for the forecast period of FY19-21e is on account of

the 20% region for FY19-21e partly

as well over the same period.

would be anything but elevated not least due



Financial Summary- US Dollar denominated

million $ FY17

Equity capital 1.0

Shareholders' funds 54.6

Total debt 16.2

Net fixed assets (incl. CWIP) 54.1

Investments 0.0

Net current assets 11.1

Total assets 57.2 Revenues 99.9

EBITDA 23.2

EBDT 21.3

PBT 18.3

PAT 12.0

EPS($) 0.37

Book value ($) 1.68

Income statement figures translated at average rates; balance sheet All dollar denominated figures are adjusted for extraordinary items.

14



US Dollar denominated


1.0 1.0 0.9 0.9 0.9

54.6 70.2 81.4 91.1 107.1

16.2 23.4 32.9 29.1 26.3

54.1 67.5 85.2 87.8 96.7

0.0 0.0 0.0 0.0 0.0

11.1 13.5 18.8 21.2 26.6

57.2 79.5 96.1 101.3 115.2

99.9 133.6 134.9 129.4 166.6

23.2 30.0 28.3 24.8 32.4

21.3 28.6 26.4 21.6 29.4

18.3 25.6 23.6 17.4 24.3

12.0 17.5 16.3 14.1 17.6

0.37 0.54 0.50 0.44 0.54

1.68 2.17 2.51 2.81 3.31

tes; balance sheet at year end rates; projections at current rates (Rs All dollar denominated figures are adjusted for extraordinary items.

14


Rs 71.61/$).



Disclosure & Disclaimer

CD Equisearch Private Limited (hereinafter referr

Limited, Bombay Stock Exchange Limited and Metropolitan Stock Exchange of India Limited (Formerly known as MCX Stock Exchange

Limited). CD Equi is also registered as Depositor

CD Equi are engaged in activities relating to NBFC

CD Equi is registered under SEBI (Research Analysts

hereby declares that –

• No disciplinary action has been taken against CD Equi by any of the regulatory authorities.

• CD Equi/its associates/research analysts do not have any financ

conflict of interest in the subject company(s)

• CD Equi/its associates/research analysts have not received any compensation from the subject company(s) durin

months.

• CD Equi/its research analysts has not served as an officer, director or employee of company covered by analysts and has not b

engaged in market making activity of the company covered by analysts

This document is solely for the personal information of the recipient and must not be singularly used as the basis of any investment

decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document sho

such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies

referred to in this document (including the merits and risks involved) and should consult their own advisors to determine the

risks of such an investment.

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positio

trading volume, as opposed to focusing on a company's fundamentals and as such, may not match wit

fundamentals.

The information in this document has been printed on the basis of publicly available information, internal data and other rel

believed to be true but we do not represent that it is accurate or complete

general guidance only. CD Equi or any of its affiliates/group companies shall not be in any way responsible for any loss or d

may arise to any person from any inadvertent error in t

the information contained within this document. Accordingly, we cannot testify nor make any representation or warranty, expre

implied, to the accuracy, contents or data contained within this document.

While, CD Equi endeavors to update on a reasonable basis the information discussed in this material, there may be regulatory

or other reasons that prevent us from doing so.

This document is being supplied to you solely for your information and its contents, information or data may not be reproduced,

redistributed or passed on, directly or indirectly. Neither, CD Equi nor its directors, employees or affiliates shall be liab

damage that may arise from or in connection with the use of this information.

CD Equisearch Private Limited (CIN: U67120WB1995PTC071521)

Registered Office: 37, Shakespeare Sarani, 3rd Floor, Kolkata

10, Vasawani Mansion, 5th Floor, Dinshaw Wachha Road, Churchgate, Mumbai

2283, 2276 Website: www.cdequi.com; Email: [email protected]

buy: >20% accumulate: >10% to ≤20% hold:

Exchange Rates Used- Indicative

Rs/$ FY14 FY15

Average 60.5 61.15

Year end 60.1 62.59

All $ values mentioned in the write-up translated at the averag

current exchange rate. Cumulative dollar figure is the sum of respective yearly dollar value

15



CD Equisearch Private Limited (hereinafter referred to as ‘CD Equi’) is a Member registered with National Stock Exchange of India


Limited). CD Equi is also registered as Depository Participant with CDSL and AMFI registered Mutual Fund Advisor. The associates of

CD Equi are engaged in activities relating to NBFC-ND - Financing and Investment, Commodity Broking, Real Estate, etc.

CD Equi is registered under SEBI (Research Analysts) Regulations, 2014 with SEBI Registration no INH300002274. Further, CD Equi

No disciplinary action has been taken against CD Equi by any of the regulatory authorities.

CD Equi/its associates/research analysts do not have any financial interest/beneficial interest of more than one percent/material

conflict of interest in the subject company(s) (kindly disclose if otherwise).

CD Equi/its associates/research analysts have not received any compensation from the subject company(s) durin

CD Equi/its research analysts has not served as an officer, director or employee of company covered by analysts and has not b

engaged in market making activity of the company covered by analysts.

e personal information of the recipient and must not be singularly used as the basis of any investment

decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document sho

as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies

referred to in this document (including the merits and risks involved) and should consult their own advisors to determine the

Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positio

trading volume, as opposed to focusing on a company's fundamentals and as such, may not match wit

The information in this document has been printed on the basis of publicly available information, internal data and other rel

believed to be true but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for

general guidance only. CD Equi or any of its affiliates/group companies shall not be in any way responsible for any loss or d

may arise to any person from any inadvertent error in the information contained in this report. CD Equi has not independently verified all

the information contained within this document. Accordingly, we cannot testify nor make any representation or warranty, expre

a contained within this document.

While, CD Equi endeavors to update on a reasonable basis the information discussed in this material, there may be regulatory

you solely for your information and its contents, information or data may not be reproduced,

redistributed or passed on, directly or indirectly. Neither, CD Equi nor its directors, employees or affiliates shall be liab

se from or in connection with the use of this information.

CD Equisearch Private Limited (CIN: U67120WB1995PTC071521)

Floor, Kolkata – 700 017; Phone: +91(33) 4488 0000; Fax: +91(33) 2289 2557 Corporate Office

Floor, Dinshaw Wachha Road, Churchgate, Mumbai – 400 020. Phone: +91(22) 2283 0652/0653; Fax: +91(22)

2283, 2276 Website: www.cdequi.com; Email: [email protected]

hold: ≥-10% to ≤10% reduce: ≥-20% to <-10% sell:

FY16 FY17 FY18 FY19

65.46 67.09 64.45 69.89

66.33 64.84 65.04 69.17

up translated at the average rate of the respective quarter/ year as applicable. Projections converted at

current exchange rate. Cumulative dollar figure is the sum of respective yearly dollar value.

15


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cd equisearch pvt ltd · • according to an industry report, the global amines market size is...

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