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