Should I buy Bodal Chem­i­cals at the cur­rent price? - George Philip

Dalal Street Investment Journal - - QUERYBOARD -

Bodal Chem­i­cals Lim­ited is one of the world’s largest man­u­fac­turer and ex­porter of dye in­ter­me­di­ates. The com­pany and its sub­sidiaries are en­gaged in the busi­ness of man­u­fac­tur­ing dyestuffs, dye in­ter­me­di­ates and ba­sic chem­i­cals.

The com­pany man­u­fac­tures a wide range of chem­i­cals used as raw ma­te­ri­als for dye in­ter­me­di­ates and dyestuffs. Its prod­ucts in­clude vinyl sul­phone es­ter, H acid, F C acid, DASA and Gama acid, among oth­ers. It pro­duces over 20 kinds of dye in­ter­me­di­ates and more than 150 vari­ants in dyestuff, used as raw ma­te­ri­als in tex­tiles, leather, pa­per and other dye con­sum­ing in­dus­tries. The com­pany’s man­u­fac­tur­ing units are lo­cated in Gu­jarat, while it ex­ports to China, Korea, Thai­land, Tai­wan, Ja­pan and Europe.

On the fi­nan­cial front, Bodal Chem­i­cals Lim­ited posted a 1.37 per cent de­crease in its rev­enue to ₹294.62 crore for the first quar­ter of FY18 on a year-on-year ba­sis. The PBIDT of the com­pany got re­duced by 9.05 per cent to ₹50.95 crore for Q1FY18 on a yearly ba­sis. The com­pany’s net profit stood at ₹31.15 crore, down by 6.08 per cent on a YOY ba­sis.

On an an­nual ba­sis, the com­pany posted a 30.36 per cent in­crease in its rev­enue from ₹975.84 crore in FY16 to ₹1272.08 crore in the FY2017. The com­pany’s PBIDT stood at ₹220.31 crore for FY2017, an in­crease of 46.94 per cent from ₹149.93 crore in FY16. The profit after tax of the com­pany in­creased 48.51 per cent to ₹128.61 crore in FY17 from ₹86.60 crore in the pre­vi­ous fis­cal.

The com­pany main­tained its TTM PE at 14.34x, whereas its peers such as IG Petrochem stood at 14.34x and

Thiru­malai Chem­i­cals at 15.9x. The com­pany’s TTM PE seems to be un­der­val­ued in com­par­i­son with the in­dus­try PE at 29.96x. The reader-in­vestor may BUY the stock at the cur­rent price.

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