Ishan Dyes & Chem­i­cals Ltd

Money Times - - News -

(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.

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