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Engineer on Paper๐Ÿ“œ,An Investor from Heart,๐Ÿ“ŠCFA L-2 Candidate,Passion for Stock Markets๐Ÿ’น Focused on finding๐Ÿ”Žundervalued hidden๐Ÿ’Žgems.All views are personal.

Sep 25, 2021, 19 tweets

A mega thread on

Cmp ~ 708 Rs as on 25 Sep 2021
Mrkt Cap - 2944 Cr
Eps - 24.5
Roce ~ 16%

๐‘ป๐’“๐’‚๐’๐’”๐’‡๐’๐’“๐’Ž๐’‚๐’•๐’Š๐’๐’ ๐’‡๐’“๐’๐’Ž ๐‘ฉ๐’‚๐’”๐’Š๐’„ ๐‘ช๐’‰๐’†๐’Ž๐’Š๐’„๐’‚๐’ ๐’•๐’ ๐’‚ ๐’—๐’‚๐’๐’–๐’† ๐’‚๐’…๐’…๐’†๐’… ๐’”๐’‘๐’†๐’„๐’Š๐’‚๐’๐’Š๐’•๐’š ๐‘ช๐’‰๐’†๐’Ž๐’Š๐’„๐’‚๐’๐’”

1/n Thread๐Ÿ‘‡

Meghmani Finechem Limited (MFL) founded in 2007, is
recognised as one of the leading
producers of ๐‘ช๐’‰๐’๐’๐’“ ๐‘จ๐’๐’Œ๐’‚๐’๐’Š ๐’‚๐’๐’… ๐’Š๐’•๐’” ๐’…๐’†๐’“๐’Š๐’—๐’‚๐’•๐’Š๐’—๐’†๐’” with backward and forward
integration facilities.


๐–๐ก๐š๐ญ ๐ข๐ฌ ๐‚๐ก๐ฅ๐จ๐ซ ๐€๐ฅ๐ค๐š๐ฅ๐ข?
๐‘ช๐’‰๐’๐’๐’“-๐’‚๐’๐’Œ๐’‚๐’๐’Š ๐’‘๐’“๐’๐’„๐’†๐’”๐’”๐’Š๐’๐’ˆ ๐’Š๐’” ๐’†๐’”๐’”๐’†๐’๐’•๐’Š๐’‚๐’๐’๐’š ๐’•๐’‰๐’† ๐’†๐’๐’†๐’„๐’•๐’“๐’๐’๐’š๐’”๐’Š๐’” ๐’๐’‡ ๐’”๐’๐’…๐’Š๐’–๐’Ž ๐’„๐’‰๐’๐’๐’“๐’Š๐’…๐’† (๐‘ต๐’‚๐‘ช๐’), ๐’˜๐’‰๐’Š๐’„๐’‰ ๐’ˆ๐’Š๐’—๐’†๐’” ๐’๐’–๐’• ๐‘ช๐’‰๐’๐’๐’“๐’Š๐’๐’†, ๐‘ฏ๐’š๐’…๐’“๐’๐’ˆ๐’†๐’ & ๐‘ช๐’‚๐’–๐’”๐’•๐’Š๐’„ ๐‘บ๐’๐’…๐’‚

Imp point to remember -
Power is the major cost for any chlor alkali producer.Any sharp rise in prices of coal will affect the margins of the company.
This can be offsetted by the rising demand and prices of caustic soda.

๐—ช๐—ต๐—ฎ๐˜ ๐—ฎ๐—ฟ๐—ฒ ๐˜๐—ต๐—ฒ ๐—ฑ๐—ฒ๐—ฟ๐—ถ๐˜ƒ๐—ฎ๐˜๐—ถ๐˜ƒ๐—ฒ๐˜€ ๐—ผ๐—ณ ๐—–๐—ต๐—น๐—ผ๐—ฟ ๐—”๐—น๐—ธ๐—ฎ๐—น๐—ถ?
๐‘ป๐’‰๐’†๐’š ๐’‚๐’“๐’† ๐’๐’๐’•๐’‰๐’Š๐’๐’ˆ ๐’ƒ๐’–๐’• ๐’‚ ๐’—๐’‚๐’๐’–๐’† ๐’‚๐’…๐’…๐’†๐’… ๐’”๐’‘๐’†๐’„๐’Š๐’‚๐’๐’Š๐’•๐’š ๐’‘๐’“๐’๐’…๐’–๐’„๐’• ๐’˜๐’‰๐’Š๐’„๐’‰ ๐’Š๐’๐’„๐’๐’–๐’…๐’†๐’” ๐‘ช๐’‰๐’๐’๐’“๐’๐’Ž๐’†๐’•๐’‰๐’‚๐’๐’†, ๐‘ฏ๐’š๐’…๐’“๐’๐’ˆ๐’†๐’ ๐‘ท๐’†๐’“๐’๐’™๐’Š๐’…๐’†,๐‘ฌ๐‘ช๐‘ฏ,๐’†๐’•๐’„

MFL is fully integrated and Major Products of the company include
๐Ÿ‘‰Caustic soda
๐Ÿ‘‰Chloromethanes (CMS)
๐Ÿ‘‰Hydrogen Peroxide (H2O2)

Upcoming Expansions

๐Ÿ‘‰Epichlorohydrin (ECH)
(To be commissioned by Q1 Fy23)
(To be commissioned by Q2Fy23)

Lets understand more about all of its Products and its Applications
๐‚๐š๐ฎ๐ฌ๐ญ๐ข๐œ ๐’๐จ๐๐š -
MFL is the 4th largest Indian player in Caustic Soda with capacity of 3.15L TPA
The capacity of Caustic Soda will be expanded further to 4L TPA
End Use of Cautic soda๐Ÿ‘‡

Mfl has the 3rd largest capacity of
Chloromethanes at 50,000 TPA.

The Chloromethane plants produce
products like Methyl Chloride,
Methylene Dichloride, Chloroform &
Carbon Tetrachloride. Chloromethanes has found a variety of applications

๐‡๐ฒ๐๐ซ๐จ๐ ๐ž๐ง ๐๐ž๐ซ๐จ๐ฑ๐ข๐๐ž-
MFL has 3rd largest capacity of Hydrogen Peroxide at 60,000 TPA.
50% of Hydrogen Peroxide is extensively used by pulp and paper industry

Upcoming Products On stream
MFL will become the 1st manufacturer of ECH
It will be based on 100% renewable resources.
ECH project will possess
a capacity of 50,000 TPA.
ECH is key raw material for Epoxy resin used as construction chemicals

๐‚๐ก๐ฅ๐จ๐ซ๐ข๐ง๐š๐ญ๐ž๐ ๐๐จ๐ฅ๐ฒ๐ฏ๐ข๐ง๐ฒ๐ฅ ๐‚๐ก๐ฅ๐จ๐ซ๐ข๐๐ž (CPVC)
MFL is coming up with 30,000 TPA of CPVC plant.
CPVC resin is the key raw material for heat resistant Pipes
CPVC demand is growing at a cagr of 13% and is expected to reach USD 5 Billon by 2027

Now,Lets Have a Look at key Fundametals of the company

Revenue has grown by 21% cagr for last 4 year
Ebitda grew by 16% Cagr
Company posted a Pat of 101 cr for Fy21
D/e stands at 0.80

Future Prospects
Company is coming up with huge capex for its ECH and CPVC plant.

Company is expected to grow its sales by 35% yoy and is expected to clock sales of 2000cr by Fy2024

By 2024, company's majority of its sales would come from its Value added derivative Products.

P&L and Balance sheet -
Currently,Long term debt stands at 528 cr which is expected to peak at 700 cr by FY23 and then may graduually reduced by 120 cr per annum through internal accurals.

๐Ÿ‘‰By Fy2024,
Company may able to do sales of 2000 cr with Pat of 250 cr on conservative basis leading to an eps of 60 .
๐Ÿ‘‰Going forward, company is one verge of transformation from a basic chemical to speciality chemical & expect it to get rerated.

๐Ÿ‘‰Successful commision of ECH & CPVC will be key driver for growth.
๐Ÿ‘‰ Beyond 2024, the company plans to venture into products for Pharmaceuticals & Agro Chemicals.
๐Ÿ‘‰Overall, The company is poised to grow at Roce of 35% catering its products to all high growth industries like๐Ÿ‘‡

Key Risk
๐Ÿ‘‰ Volatility in Raw material cost like Coal, Salt,etc could affect profitablity
๐Ÿ‘‰Slowdown in economy
๐Ÿ‘‰Risk of growing debt levels
๐Ÿ‘‰Delay in project completion
๐Ÿ‘‰Competition from its peer group

Thats end to the thread of Meghmani finechem #Meghmani fincehem #mfl
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