Multi Baggers

Balaji Amines is a leading manufacturer in the field of Fine Chemicals, Speciality Chemicals, Aliphatic Amines and , having two Plants in Maharashtra and Hyderabad. A third plant for R&D products has been set up at Solapur.

The Company caters to API, Agro Chemicals, Refineries (Lube extraction) Water Treatment Chemicals, Rubber, Photographic Chemicals and Neutraceuticals.

The Company had commenced production of Gamma Butyro Lactone (GBL) in July 09, with a capacity of 18 MT per day,which is a 100% import substitute and will be a source to make NMP by the company.

In Nov. 09, the company also commenced production of Polyvinyl Purrolidone (PVP K-30), which is a binder for granules and tablets. This product is presently made by ISP and BASF around the globe apart from China. The plant capacity for the product is 1,200 TPA and with this, the company will be having advantage of in-house raw , right from GBL, 2P to PVP K-30. This is the 6th product in the company’s basket and is likely to add Rs. 50 crores to the topline of the company.

For FY09, the company achieved a total income of Rs. 254 crores with PAT at Rs. 15.33 crores, resulting in an EPS of RS. 23.65. Cash EPS was at Rs. 40.85.

For first 6 months of FY10, the total income of the company was placed at Rs. 125 crores with PAT at Rs. 12.60 crores, resulting in an EPS of Rs. 19.45. So, FY10, is likely to have a topline of above Rs. 275 crores with expected EPS of RS. 42 and cash EPS of close to Rs. 60.

The present paid up equity of the company is at Rs. 6.48 crores with face value of Rs. 10 each. Promoters’ stake in the company is at 55.71% while 9 public category shareholders are holding over 21% stake in the company.

The net worth of the company, as at 30-09-09, is at Rs. 83 crores, resulting in a book value per share at Rs. 128. The total debt of the company is at Rs. 100 crores, of which Rs. 50 crore is against working capital.

Share is presently ruling around Rs. 135-145 which translates into a market capitalisation of Rs. 90 crores only. This is 0.30 times of topline. Even present market price is discounting expected EPS of Rs. 42 for FY10 by about 3.20 times and by about 2.50 times of FY11, which is expected to have an EPS at Rs. 55 per share.

Share at Rs. 143 looks a safe buy as it can move to Rs. 200 in next 6-8 months, with virtually no downside risk

* Recommended price adjusted for bonus and splits