Ishan Dyes & Chemicals Ltd
(BSE Code: 531109) (CMP: Rs.47.40) (FV: Rs.10) By Bikshapathi Thota
Ishan Dyes & Chemicals Ltd (IDCL) entered into the highly competitive Chemicals and Pigments industry in 1993. It commenced commercial production in November 1995 and marked its presence in the global markets with its superior quality products. It exports a wide range of phthalocyanine blue pigments for plastic, waterbase and offset inks, paint, etc. It manufactures a range of solvent dye, which does not ionize and is soluble in organic solvent. At its 2,400 TPA blue plant unit, it manufactures a wide range of pigment blues such as C-P-C Blue Crude, Pigment Alpha Blue 15:0, Pigment Alpha Blue 15:1, Pigment Alpha Blue 15:2 and Pigment Beta Blue 15:3.
IDCL aims to become a leader in the Pigment industry and a significant global player by building modern technology, business process capability, adopting a customer-centric approach and improving its image in the global markets. Its marquee clients include Clariant, Heubach, Lanxess, Pyosa, Ciba, etc.
Research & Development: IDCL’s R&D activities are primarily project and application oriented. It differentiates itself from its competitors through its focus on quality and innovation. It offers its customers technically sound and economical solutions in the field of copper phthalocyanine blue pigments and related pigments.
Prospects: In FY19 so far, IDCL has incurred capex of more than Rs.8 crore to modernize and improve its plant, machinery and building, which will improve its overall efficiency, reduce its operating cost and produce better quality products with higher output. This in turn will facilitate better yields and also boost overall margins. IDCL has developed a sound export market apart from introducing new products, which will drive growth going ahead. Barring unforeseen circumstances, the management is confident of delivering a better performance in the next few years. The management is also working on various expansion plans and opportunities to diversify.
Conclusion: Currently, the stock trades at a P/E of 8x FY19E earnings. Based on its growth potential, a reasonable P/E of 15x will take its share price to Rs.90 within a year.