#FINEORGANICS -VERY FINE CHEM. CO.

FOIL is in d oleo chem based additives buss with majority of additives sales coming from food (30%) & plastic(40%) segm. together contributing 70% to d overall revenues & rest being contri. by additives like paints, rubber, cosmetics etc.
Founded in 1970, by Mr. Ramesh Shah, a Mumbai-based businessman wid experience in chem. trading and Mr. Prakash Kamat, a skilled technocrat from Institution of Chemical Technology.

Promoter hold 75% stake & only 3.48% (10.65 lacs shares) r available for Retail shareholders.
Co. claims to be d largest organised player of Oleo-chem based green additives in India.
-Amng top 6 global players in the specialty food emulsifiers
-1 of d 5 global players in d polymer additives industry
-dey also claim to develop proprietary tech. to mfg green additives.
PRODUCTS
Dey mfg additives whch are naturally derived from oleochemicals other than synthetically derived from petrochemicals. They have around 400+ product profile which has doubled in last few years.

So, what these additives are & why they are important?
Since plastic & food Additives are major contributor to the revenue let talk about Plastic Additives first.

PLASTIC ADDITIVES - Plastics prod r made frm polymers & these polymers are mixed wid a complex blend materials called plastic additives.
They mfg wide range of additives for polyolefins, polyolefin compounds masterbatches, styrenics compounds, engineering plastics, rigid PVC products.
So basically they r req. in mostly all d plastic products that we use n see in our daily life’s.
Uses of these additives are 👇 Image
D packaging sector is d major user of plastic additive (26%) followed by consumer goods (21%) & construction & auto industry, with 20% each.

Global mkt size of plastic is around $30bn (2021E)whereas Indian mkt size is around 9000crs growing with a CAGR of 8-10%. Image
FOOD ADDITIVES
R substances added to food whch affect its characteristics. They are used to preserve,flavour, blend, thicken etc.
Food additives are strictly regulated and monitored by governments to ensure the health of people therefore there is🚫entry barrier into this segment. Image
GLOBAL MKT SIZE – $2.4bn(2023E) INDIAN MARKET SIZE – 1100 crs (2023).
Acc. To mgt they were having 90% mkt share in food additives segment. Inc shift of consumer to packaged food due to covid might lead to increased demand for their products too. Image
Other industries serves are as shown below. Image
CLIENTS
700+ direct customers
160+ distributors frm 70 countries.
CLIENTS-Reliance Industries Limited, GAIL, Haldia Petrochemicals Limited, Exxon Mobil, Dow Chemicals etc.
FOOD SEG. HUL, Mondelez, Coca Cola, Britannia, Parle, etc
No customer accounts for more than 5% of SALES.👍
RAW MAT.
Since their products are derived from oleochemicals which are mfg by processing vegetable oil,Palm oil etc these oils act as a raw material for them. Other raw mats are fatty acids, fatty amines, fatty alcohols etc. Image
co. procures raw materials from domestic and international markets & uses a mix of spot contracts and fixed-price agreements of up to six months.

- 45% of purchases are through the top two suppliers only.
-28% of raw materials are imported.
ENTRY BARRIERS
There is a high entry barrier as customers don’t easily shift to other players offering at lower prices, Quality is the main parameter & it takes months or years to get approval from the customers.
New players don't come in due to complex tech. & resources req.
COMPETITORS – its major competitors are global players like THE KERRY GROUP, DANISCO ETC. Image
CAPACITY- it has total capacity of 101,300 MTPA at Ambernath1(49500 MTPA)
Ambernath 2 (5000 MTPA)
Ambernath3( 32000 MTPA)
Badlapur (6400 MTPA) and
Dombivali (8400 MTPA). Image
EXPANSION – By FY22 they will reach around 131300 MTPA which is nearly double of FY19 CAP-69300 MTPA. Mgt expects to reach optimum utilization in next 4yrs.

REVENUE CONTRIBUTION – EXPORTS- 55% DOMESTIC-45%
Major Countries of export are
i)North &South America -20-25%
ii)EUROPE - 20-22%
iii) Middle East & Africa 30-40%
iv) Asia 20-25% (INCLUDING CHINA)

They derives 50% of rev through annual contract, while rest 50% comes from short-term contracts (about 3months) through distributors.
BAL SHEET
they hv got quite strong balance sheet with NET DEBT FREE.
Cash+ INV - 243crs
Debt- 125crs (4.8% int. cost)
Net asset - 217crs vs 78crs (+178%)⬆️
WC DAYS - 75
P&L
GP margins are stable around 40% wid some fluctuations due to raw mat price volatility
In 2017 all oleochem co's faced margin pressure to inc in palm oil prices.
Over the years margins hv steadily improved due to op lev benifits. Image
Ratios
One thing wch stands out is d return ratios
ROCE - 32%(FY19) Fy20 ROCE WIL BE LOW DUE RECENT EXP.
ROE- 26%

Wats amazing is its NET FIXED ASSET TURN.
NEARLY 10X at peak capacity.
Don't think it being high due to high realization as prod doesn't seem to be commodity at all. Image
Valuations - Doesn't look cheap from any angle.
But given the Buss. model of co.
High Entry Barriers
Good Return Ratios
Healthy cash Generations.
Low float.
Mgt pedigree

It can be a good buy if mkt provides opport.

NOT A RECOMMENDATION.

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Aditya Mehta

Aditya Mehta Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @aditya942000

30 Sep
🧵Oberoi Realty Vs Sunteck Realty

‼️Since real estate is d talk of d town, so let’s compare d 2 nearest competitors in d MMR market.

Both have
-minimum debt

-no CG issue

-clean and reputed promoters

@pd_log @nid_rockz @SwarnashishC @AnishA_Moonka @mmvRavindra
👉So, Oberoi Realty is already a reputed brand name in MMR market.

It is into mid & luxury segment along with a commercial portfolio which provides it consistent rental rev.
👉Sunteck too was into mid and Luxury resi segment but in 2018 they forayed into affordable housing.

They do not have any active commercial portfolio, but they do had plans to create assets ,which were delayed due to covid.
Read 34 tweets
26 Jun
How Ethanol Policy changed the fortunes of GLOBUS SPIRITS❓

👉So, Globus spirits is one of the largest grain based distillers in India.
👉They sell country liquor in the markets of Rajasthan ,Haryana,West Bengal and Delhi.
Have 30% mkt share in Rajasthan in IMIL segment.
👉They enjoy around 30%+ Ebitda margins in IMIL segment (earlier they were 20%+)
👉So, the co. decided to enter Bihar market and set up a distillery there.

👉And when all the capex was completed,they faced a huge setback from the state govt.
👉After Nitish Kumar was sworn in as C.M., he declared Bihar a Dry state,as a result of which their plant was shut down.

👉After all the legal struggles and battle they received an order from High Court in oct 2019 whch allowed them to operate d plant in order to produce ENA.
Read 15 tweets
15 Jun
🧵Route Mobile - Routing Messages to your Mobile📶

Just a brief thread on what Route Mobile does & what the future holds for it?

Scroll down👇 Image
📲Route Mobile Ltd (RM) provides cloud-communication platform as a service (CPaaS) to enterprises, over-the-top (OTT) players & mobile network operators (MNOs).

Confused❓

👉So what they basically do is that they act as an intermediary between enterprise & their customers.
Further Simplifying it ➡️ The msgs which u receive on ur phone for banks transactions,OTP,Order confirmation from e-comm etc. are all routed through CPaaS Software known as API’s.

➡️Their Api’s are integrated with the enterprises whch they serve and they get revenue per sms sent
Read 22 tweets
11 Jan
#Butterfly GANDHIMATI APPLIANCESThe co.

A small thread on how Co. hv changed over last few years🧵

👉With new & young mgt. they r aggressive in capturing market share

&

results r already visible.

@pd_log @mmvRavindra @SwarnashishC @AnishA_Moonka

Image
👉Online sales contribute 20%+ of total Rev.

👉Co's products r bestsellers on FLIPKART

👉If u search for mixer grinder than on the very 1st glimpse you will notice 'BESTSELLER' bagde on Butterfly Rapid Mixer grinder Image
👉Same is the result with many other products like GAS STOVES & ELECTRIC KETTLES ETC.

👉Their Rapid Mixer grinder is among the lowest priced but Good quality products.

👉Their direct competitor PRITHI costs double than that of BUTTERFLY'S PRODUCTS ImageImage
Read 19 tweets
15 Aug 20
Adi-Finechem #FAIRCHEM

-Adi Finechem Ltd. Founded in 1985 by Shri R.Harivallabhdas and Shri Nahoosh J Jariwala.

-It is engaged in mfg of Oleochemicals & Neutraceuticals.

-They operate through only one plant in SANAND,AHMEDAAHMEDABAD,GUJARAT.
- With the capacity of 72K MT inc. from 45K MT up 60% from 2016.

-The plant has one of the largest processing capacities for natural soft oil-based fatty acids in India.

-Their main products are
i) OLEOCHEMS-dimer, monomer, linoleic acid etc.
ii)Neutraceuticals - (Natural) Mixed Tocopherol and Sterol Concentrate

They r further undergoing expansion:
-Neutraceuticals - to manufacture sterols and higher concentration tocopherols.
-to manufacture bio-diesel using three by-products of its manufacturing process:
Read 21 tweets
30 Jul 20
LAURAS LABS Q1FY21: Marvellous no's
-Operating Leverage comes into play
-Margins aided by Backward Integration👍
-Finance cost ⬇️
-PAT 11x🚀
-Rev. +77%
- Ebitda Marg.- 29.29% vs 15%
-Pat Marg. 17.63% vs 2.74%

ROCE-32.3% ROE-37% (ANNUALIZED)
Co. has successfully derisked its business from mainly an ARV API co. to diff segments.
FDF
-Has been star performer. Reaping rewards of past inv.
-Good predictability of buss. bcoz healthy order book in both Tender & non-tender seg.
-As per mgt they r at full capacity utilization lets see how much more incremental sales it can generate in FDF.
Read 5 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!

:(