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MEGHMANI FINECHEM LIMITED

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

𝑻𝒓𝒂𝒏𝒔𝒇𝒐𝒓𝒎𝒂𝒕𝒊𝒐𝒏 𝒇𝒓𝒐𝒎 𝑩𝒂𝒔𝒊𝒄 𝑪𝒉𝒆𝒎𝒊𝒄𝒂𝒍 𝒕𝒐 𝒂 𝒗𝒂𝒍𝒖𝒆 𝒂𝒅𝒅𝒆𝒅 𝒔𝒑𝒆𝒄𝒊𝒂𝒍𝒊𝒕𝒚 𝑪𝒉𝒆𝒎𝒊𝒄𝒂𝒍𝒔

1/n Thread👇

Meghmani Finechem Limited (MFL) founded in 2007, is
recognised as one of the leading
producers of 𝑪𝒉𝒍𝒐𝒓 𝑨𝒍𝒌𝒂𝒍𝒊 𝒂𝒏𝒅 𝒊𝒕𝒔 𝒅𝒆𝒓𝒊𝒗𝒂𝒕𝒊𝒗𝒆𝒔 with backward and forward
integration facilities.

2/n

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐂𝐡𝐥𝐨𝐫 𝐀𝐥𝐤𝐚𝐥𝐢?
𝑪𝒉𝒍𝒐𝒓-𝒂𝒍𝒌𝒂𝒍𝒊 𝒑𝒓𝒐𝒄𝒆𝒔𝒔𝒊𝒏𝒈 𝒊𝒔 𝒆𝒔𝒔𝒆𝒏𝒕𝒊𝒂𝒍𝒍𝒚 𝒕𝒉𝒆 𝒆𝒍𝒆𝒄𝒕𝒓𝒐𝒍𝒚𝒔𝒊𝒔 𝒐𝒇 𝒔𝒐𝒅𝒊𝒖𝒎 𝒄𝒉𝒍𝒐𝒓𝒊𝒅𝒆 (𝑵𝒂𝑪𝒍), 𝒘𝒉𝒊𝒄𝒉 𝒈𝒊𝒗𝒆𝒔 𝒐𝒖𝒕 𝑪𝒉𝒍𝒐𝒓𝒊𝒏𝒆, 𝑯𝒚𝒅𝒓𝒐𝒈𝒆𝒏 & 𝑪𝒂𝒖𝒔𝒕𝒊𝒄 𝑺𝒐𝒅𝒂

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.

𝗪𝗵𝗮𝘁 𝗮𝗿𝗲 𝘁𝗵𝗲 𝗱𝗲𝗿𝗶𝘃𝗮𝘁𝗶𝘃𝗲𝘀 𝗼𝗳 𝗖𝗵𝗹𝗼𝗿 𝗔𝗹𝗸𝗮𝗹𝗶?
𝑻𝒉𝒆𝒚 𝒂𝒓𝒆 𝒏𝒐𝒕𝒉𝒊𝒏𝒈 𝒃𝒖𝒕 𝒂 𝒗𝒂𝒍𝒖𝒆 𝒂𝒅𝒅𝒆𝒅 𝒔𝒑𝒆𝒄𝒊𝒂𝒍𝒊𝒕𝒚 𝒑𝒓𝒐𝒅𝒖𝒄𝒕 𝒘𝒉𝒊𝒄𝒉 𝒊𝒏𝒄𝒍𝒖𝒅𝒆𝒔 𝑪𝒉𝒍𝒐𝒓𝒐𝒎𝒆𝒕𝒉𝒂𝒏𝒆, 𝑯𝒚𝒅𝒓𝒐𝒈𝒆𝒏 𝑷𝒆𝒓𝒐𝒙𝒊𝒅𝒆,𝑬𝑪𝑯,𝒆𝒕𝒄

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

Upcoming Expansions

👉Epichlorohydrin (ECH)
(To be commissioned by Q1 Fy23)
👉CPV
(To be commissioned by Q2Fy23)

Lets understand more about all of its Products and its Applications
𝐂𝐚𝐮𝐬𝐭𝐢𝐜 𝐒𝐨𝐝𝐚 -
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 soda👇

𝐂𝐡𝐥𝐨𝐫𝐨𝐦𝐞𝐭𝐡𝐚𝐧𝐞𝐬-
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

𝐇𝐲𝐝𝐫𝐨𝐠𝐞𝐧 𝐏𝐞𝐫𝐨𝐱𝐢𝐝𝐞-
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
𝐄𝐩𝐢𝐜𝐡𝐥𝐨𝐫𝐨𝐡𝐲𝐝𝐫𝐢𝐧(𝐄𝐂𝐇)
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

𝐂𝐡𝐥𝐨𝐫𝐢𝐧𝐚𝐭𝐞𝐝 𝐏𝐨𝐥𝐲𝐯𝐢𝐧𝐲𝐥 𝐂𝐡𝐥𝐨𝐫𝐢𝐝𝐞 (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.

Conclusion~
👉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 .
👉Going forward, company is one verge of transformation from a basic chemical to speciality chemical & expect it to get rerated.

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

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

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