Multi Baggers
Aditya Birla Ch
BSE ID : 500057 NSE ID : ABCIL
RECOMMENDED PRICE 150.75
PEAK FROM RECO 342.80 127.40%
CURRENT PRICE 225.20 Resource id #18
Aditya Birla Chemicals (India) established in 1976. It is a unit of the Aditya Birla Group and one of the leading chlor alkali companies in India. We initiate a 'BUY' on the stock with a target price of Rs 200 with the medium to long term investment horizon.
Aditya Birla Chemicals
Aditya Birla Chemicals (India) Limited (formerly known as Bihar Caustic and Chemicals) is one of the leading chlor-alkali companies in Eastern India with a caustic soda capacity of 2,42,725 tpa capacity. The company manufacturers various chlorine derivatives as value added products.
The company has registered robust results for the quarter ending December 2013. The revenues from operations grew by approx. 42 percent to Rs 286.87 crores vs. Rs.202.34 cr. in the corresponding quarter last year. Operating profit climbed sharply by 22.57 percent at about Rs.65.15 crores as against Rs.53.15 crores in the previous year quarter. The net profit skyrocketed at Rs.16.36 crore for the quarter as compared to Rs.9.83 crore (pre-exceptional). EPS for the quarter stood at Rs.6.99.
Despite the pressure of increasing input costs for power, coal and other raw materials and the unstable supply of power from the grid, the company has succeeded in maintaining its excellent business performance.
ABCIL has a strong prominent parentage (Aditya Birla group) and experienced management, leading position in the chlor-alkali industry in the Eastern region of India. The company is important as a key input supplier given group's internal requirement for caustic soda, integrated operations and diversified end-user industries.
Valuation
With strategic acquisitions, expanding geographical presence, sound fundamentals, strong parentage and stable outlook for caustic soda industry; Aditya Birla Chemicals (India) Ltd. growth prospects and profitability looks attractive. We believe the company is trading at an attractive valuation at 5.15x and 3.53x of FY14EPS of Rs.29.28 and FY15EPS of Rs.42.74. We initiate a 'BUY' on the stock with a target price of Rs.200 (appreciation of about 33 percent) with the medium to long term investment horizon.
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Aditya Birla Chemicals_HemSec_Multibagger.pdf
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