Valiant Organics CMP 2795
✍️A Specialty Chemical Manufacturing Company.
✍️The products of the company find several applications mainly in the agro-chemical, pharmaceuticals, rubber, dyes, pigment & in the making of veterinary drugs
✍️Fully integrated manufacturing facilities
✍️Revenue: Domestic 85% & Export 15%
(Agro 40%,Specialty 30%,Dyes+Pigments 20%,API 10%)
✍️Rev. share from API is likely to increase in coming yrs
✍️One of the most competitive producers of Chlorination, Ammonolysis,Acylation,Hydrogenation & Methoxylation based specialty products
✍️Inorganic growth & organic capital expansion without much increase in Debt Equity
✍️Leveraging a de-risked biz model
✍️The synergistic acquisition of Amarjyot chemical ltd last year
✍️Ability to forward integrate by adding high-margin & high value products to maximise growth
Capacity Expansion
✍️Increased Chlorophenol capacity to 18000 MT p.a. by completing the expansion at the Sarigam plant. (From 4800 MTPA in 2017-18 to 18000 MTPA in 2019-20)
✍️Increased the capacities of hydrogenation products from the 18k MT to 26k MT per annum (Jhagadia plant)
✍️Added Ortho Nitro Anisole & Para Nitro Anisole to portfolio
✍️Increased the Ammonolysis capacity at Tarapur & Vapi plants from ~13k MT to 16k MT p.a.(The cost benefit of this will be evident from the H2 FY2021)
✍️3 new projects at Jhagadia with an estimated capEx of INR 100 Crs
✍️Backward integration will enable mfging key RM in-house & in providing significant cost savings & better profit margins
✍️Likely to commence operations of Para Amino Phenol (PAP) & Ortho Amino Phenol (OAP) which are import substitutes in the H2 FY2021
#Specialtychemicals
✍️PAP - Identified as key intermediates of pharma by the govt which is to be incentivised under recently announced PLI scheme
✍️The MGT is considering to set up a plant for Paracetamol with other drug intermediates & APIs in future
✍️Land Bank of 68000 Sq. mtrs at Sayakha & Dahej
✍️Fully integrated & multi-purpose mfging processes (No reliance on Job-work)
✍️Diff. product mix within the same facility allows an optimum capacity utilization
✍️OP & NP margins improved by 8.5% & 16% respectively in FY2020(Good product mix+better margin +reduction in tax rate)
✍️Recently Nippon India, Sundaram MF & Goldman Sachs bought Valiant organic shares
✍️Many institutions have started looking at Valiant since it has moved to the main board
✍️Outlook remains good for long-term
Source: AR 2019-20
Disc: Not a buy/sell Reco. Just for study purpose
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