Business
Ahmedabad based dyes manufacturer is in the business of manufacturing and marketing of reactive dyes and dye intermediates with production capacity of 10,800MTPA.
Financials
FY2002-2003 to FY2006-2007
Revenue CAGR 11%
Profit CAGR of 25%
FY2006-2007
Revenue: Rs 140 crore
Profit: Rs 8.63 crore
Objectives
Backward integration project which will produce sulphonic acid, oleum and chlorosulphonic acids. Setting up of a co-generation plant of 4 MW
Valuation:
The stock on offer is valued at 10.53 to 12.64 times its annualized earning for first half of FY2007-2008 on fully diluted equity.
Our call:
JV with Zhejiang Lonsen for setting up a reactive dyes manufacturing facility having initial capacity of 20,000 MTPA in India.
Margins expansion is attributed to better pricing of products and introduction of value added products.
Looking at valuations and growth opportunities available in other sectors and opportunities in this sectorlike Bodal Chemicals puts this initial public offering in the list of AVOID.
Source: UMCapital India |
