Amal Ltd

Money Times - - News - By Nayan Pa­tel

(BSE Code: 506597) (CMP: Rs.148.55) (FV: Rs.10)

Amal Ltd was pro­moted by the Pi­ra­mal group in 1974-75 and its con­trol­ling in­ter­est was sold to Atul Ltd of the Lalb­hai group in 1985-86. The Lalb­hai group is a lead­ing in­dus­trial group which com­prises com­pa­nies like Atul Ltd and Arvind Ltd. Amal Ltd man­u­fac­tures and mar­kets bulk chem­i­cals such as Sul­phuric Acid, Oleum and their down­stream prod­ucts such as Sul­phur Diox­ide and Sul­phur Tri­ox­ide. These chem­i­cals are pre­dom­i­nantly used by the Chem­i­cal and Dyestuff in­dus­tries. Its plant is lo­cated at An­klesh­war in Gu­jarat.

Amal Ltd has an eq­uity cap­i­tal of just Rs.9.43 crore. The pro­mot­ers hold 65.51% of the eq­uity cap­i­tal, which leaves 34.49% stake with the in­vest­ing pub­lic.

For FY18, Amal Ltd re­ported 9% higher PAT of Rs.9.7 crore on higher sales of Rs.32.32 crore and an EPS of Rs.11.92. Dur­ing Q1FY19, it re­ported 113% higher PAT of Rs.2.96 crore on 44% higher sales of Rs.9.25 crore and an EPS of Rs.3.14.

Amal Ltd will ben­e­fit from the price hike in sul­phuric acid from around Rs.4000/tonne ear­lier to be­tween Rs.7500/tonne and Rs.10000/tonne now. Cur­rently, the stock trades at a P/E of 12.42x, which is the cheap­est in the chem­i­cals sec­tor. Atul Ltd trades at around Rs.3195.50 while Amal Ltd is avail­able at 34% dis­count to its 52-week high of Rs.226 recorded on 8 No­vem­ber 2017. Based on its fi­nan­cial pa­ram­e­ters, the stock looks quite at­trac­tive at the cur­rent level. In­vestors can buy this stock with a stop loss of Rs.125. On the up­per side, it could zoom to Rs.190-200 in the medium-term-to-long term.

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