(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.