Thread by @Arthavruksha11

Small Write up Analysis on #PaushakLtd

A Thread 🧵

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Overview -

💣Paushak is into Phosgene Chemistry

💣India's Largest Player in Phosgination

💣Paushak uses Phosgene for Intermediates and Speciality Chemicals

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What is Phosgene ?

💣Phosgene was used to make Bombs in WW2

💣Hence Government Doesn't allow anyone to make it

💣Phosgene is also an intermediate which has end usage in automative, thermal, furniture, medical, agriculture, explosive stabiliser, solvent etc

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💣To manufacture phosgene in india you have to take many approvals of Government.

💣Only 3 Players in India have the approval to manufacture Phosgene in India.

💣Hence here Govt. Regulation Moat comes into play.

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💣Now your question will be what is a intermediate and how it is used in a specialty chemicals ? Look at below image

💣This is the whole value chain of an specialty chemical in which Raw materials needed is an intermediate & KSM for making for specialty chemical

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Industry Overview -

💣This is Consolidated Industry as talked earlier due to Govt Regulations

💣Only 3 Players in India have approval to manufacture Phosgene. And in that comes Paushak.

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💣Now what matters in this industry is how much capacity each player has

💣Current Capacity of Paushak - 4,800 MT

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Capex -

💣They are planning to do a Capacity Expansion from 4,800 MT to 14,000 MT

💣Almost a 3X jump.And also have got Govt Approval to do so.

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Products -

💣Isocyanates, Chloroformates, Substituted Urea, Acid Chlorides etc

💣These Products are used in Manufacture of flexible and rigid foams, fibers, coatings such as paints and varnishes

💣Also Company offers CMO services (Custom Synthesis)

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Financials of the Company -

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Thanks for reading this thread till end , Hope you liked it

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Risks in this Business -

💣As Phosgene is a destructive gas , if not handled correctly can cause explosions in factories

💣Very poor information available for retail investors, lack for disclosures