I G PETRO­CHEM­I­CALS

Dalal Street Investment Journal - - RECOMMENDATIONS EQUITY -

Aflag­ship of Dhanuka group, I G Petro­chem­i­cals is the largest in In­dian maker of an or­ganic com­pound ph­thalic an­hy­dride (PA), used as an in­ter­me­di­ate pro­duc­tion of plas­ti­ciz­ers used in plas­tics, un­sat­u­rated polyster resins, alkyd resins, poly­ols and a down­stream prod­uct of or­thoxy­lene petro­chem­i­cal. The com­pany is ex­pected to post rev­enue and PAT CAGR of 12.5per cent and 23per cent over FY17-19E, re­spec­tively, with ex­pected PA de­mand growth of 7per cent CAGR over 2016-21. Over­all, the com­pany ex­pects to in­crease its ca­pac­ity util­i­sa­tion and brown­field ex­pan­sion to cater to ma­jorly domestic de­mand for PA and MA. It has posted ex­u­ber­ant FY17 num­bers with rev­enue and PAT grow­ing 13per cent and 83per cent, re­spec­tively. Thereby, con­sid­er­ing its lead­er­ship po­si­tion, com­pet­i­tive edge and low cost high mar­gin prod­ucts port­fo­lio, we rec­om­mend a Buy in the scrip for a tar­get of ₹530 and with a stop loss of

₹435.

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