Thread by @OverView11

Sadhana Nitro Chem - A Deep Dive. Let’s look deeper into the key products and the chemical process of @NiftyGranmaster's first FBB pick! Spotting upcoming industry winners is no mean task. And #SumitBansal ji is turning out to be a grand master at this! Time and again! 1/

Sadhana Nitro Chem is not a new kid on the block. It was established in 1973 and has been in the forefront of Nitrobenzene (NB) production in India. The company also has a wholly owned subsidiary in Belgium, catering to the European market. 2/

During 50 years of its operation, it has fined tuned its technology and stayed strong. The decades of struggle, manufacturing the highly toxic NB and its derivatives has helped to make it a very hard nut to crack. 3/

There aren’t major competitors while the company is on the verge of breaking into production of highly sought after and complex chemical, Para Amino Phenol (PAP). 4/

Aniline produced by Sadhana is largely sold to downstream industries manufacturing MDI (methylene diphenyl diisocyanate) used in the prodn of polyurethanes for the furnishing & packaging industry including Auto. Aniline is also used in rubber, dyes, paints & solvent industries 6/

Apart from the above 2 key products (NB & Aniline), Sadhana will introduce Para Amino Phenol (PAP). into the market, soon. The company is setting up a 36000TPA plant under the Govt. of India’s PLI scheme with investment of ~Rs.200 crore. 7/

PAP is directly used by the pharma industry in manufacture of paracetamol. PAP also finds demand from exotic cosmetic industry where price realization is very high, if top quality of PAP, can be assured. 70% of Indian demand for PAP is met by imports from China. 8/

However, recent Chinese intervention in controlling polluting industries has resulted in contraction of availability of PAP from China. Indian Pharma & the global cosmetic industries will be keenly looking at Sadhana’s success in the production of PAP using Nitrobenzene route 9/

Globally, most of the PAP production, including in China, uses Para Nitro Chloro Benzene (PNCB) route. Use of NB route by Sadhana Nitro Chem to make PAP successfully, will reduce production costs and improve quality of the product, by several notches. 10/

So this is the key! QUALITY & COST. Global demand, especially from cosmetic industry will be driven by quality of product which is expected to be much superior to that of PAP produced via PNCB route, by eliminating certain microscopic impurities generated in the PNCB process 11/

This demand, can result in Sadhana Nitro Chem’s topline growing on the back of heavy dollar inflows. This is apart from the assured demand for PAP from large Pharma companies, including Granules India. 12/

The recent Rs.100Cr investment in Sadhana Nitro Chem, by Quick Heal promoters and family members, in their personal capacity, gives us a hint that the new plant could be getting ready and must have successfully demonstrated cost reduction and quality of product. What say?! 13/

Hope all of you, the great followers of Sumitji, now have, a better understanding of his, first FBB stock which if things go as expected, could turn out to be a blockbuster like Aarti Industries or PI Industries! Let's bow to the superlative acumen of Sumitji to spot winners! 🙏