Camlin Fine Sciences Ltd. (CFSL) Research Report By India Nivesh

I posted a research report on Camlin here. Giving a cross-reference here.

Camlin Fine Sciences Ltd (CFSL) is one of the India’s leading manufacturers & exporters of Food antioxidant, Fine Chemicals, and Food Grades Products. The company has emergedas niche specialty chemical company with global market leadership in key food antioxidants like TBHQ andBHA.Additionally,itsbreakthroughintowaterbased synthetic (Solvent Free) technology to manufacture GUAIACOL (Raw Material for Vanillin) gathered attention of many MNC blenders and key manufacturer. The products portfolio offered by CFSL is not available with any domestic player and globally also very few competitors exist.We recommend BUY with target price of Rs.136 on CFSL.

 

I liked two things about this scrip. One, the second generation scion did not take the easy way out of just growing the existing business. He started something entirely new. Second, he has global dominance in some of his product categories. Both factors seem to indicate a mindset of hunger for growth. Firms with globally dominant positions make me greedy for them.

Apart from these two factors, the P&L and Balance Sheet and most ratios look really good. This is one for the long haul.

 

Camlin is up 4.69% Rs. 112.65 @1500 hrs

 

I like the fact that there are very clear short term, mid term and long term triggers. Multiple new product launches in the short term and the coming on stream of the new Dahej facility in 2018. Both together seem to imply that this will see a steady and gradual increase till fy 2017 and then a quantum shift to the next level. this is an exciting share. The note of caution ( I realized just now ) is that the company dilutes equity consistently. Data from 2015 upto 2011 below :

Shares in issue (lakhs) 958.88, 472.04, 469.44, 467.94, 93.06

 

Here is a further report from IndiaNivesh:

Camlin Fine Sciences may test Rs 136: Daljeet Singh Kohli Daljeet Singh Kohli of India Nivesh Securities is of the view that Camlin Fine Sciences may test Rs 136.

Daljeet Singh Kohli of India Nivesh Securities told CNBC-TV18, " Camlin Fine Sciences is actually a story for two to three years. The chemicals that they make, they hardly have any competition in India. There is only one major company which is called Rhodia that is major competitor to them. They are into food preservative products basically, hydroquinone. One and half years back, they bought a company called Boehringer in Europe which actually gave them this technology and that was the game changer for the company."

"The trigger pint is also coming from there only because of that technology now being available, the company is going for an expansion in Dahej for which the project has started which will come up in second half of FY18 and then full ramp up will happen in FY19. They have to import everything from this European subsidy. As a result, 55 percent of the European subsidiaries business is internally consumed. So, it is not showing up in the numbers," he said.

"Both these triggers will work in FY'18. Now from here till FY'18, the trigger will be the launch of new products. They have something like 30 odd products in the pipeline which will keep on coming like four or five products which are already in the trial stage. They have already started giving it out to the customers. They will try for the next three to six months. So, those numbers will start coming in. So, there are a few continuous triggers till three years and then in the next three years, there is a big trigger which will be from the new facility. Once that comes in, from FY'17 to FY'18, revenue growth projection for our model is 50 percent and from FY'19, it will be another 50 percent. So, that means, in FY18-FY19, from current level, we will be at least three to four times higher. So, that is the difference the new project will make."

"In terms of valuation, there is actually no comparable, but if you still compare with other chemical companies, you will find that this actually has a return equity of almost 20-25 percent and return on capital of almost 30 percent but still trading at half the valuation. We believe that once those numbers will start coming in, there will be more visibility, this gap will narrow down. Therefore, the stock can actually appreciate to a much larger extent. As of now, for FY'17, we have given a target of Rs 136, but this can be definitely revised upwards," he added.

Read more at: https://www.moneycontrol.com/news/stocks-views/camlin-fine-sciences-may-test-rs-136-daljeet-singh-kohli_3543561.html

 

Here is another report on Camlin Fine Sciences.

 

The report projects a 70% upside. Wow!

 

Thank you for your information sir. Hope I will also some few hundred shares for long term.

 

These shares can be very volatile. So, it is best to buy them slowly and especially on a bad day.

 

Thank you sir.

 

Camlin Fine Sciences Ltd Management meet update (Nirmal Bang)

We believe global leadership position in key chemicals, moving up
in the antioxidant value chain and entering into the lucrative
vanillin market with potential 24 per cent market share and
expansion in EBIDTA margins are key value drivers for the stock
performance over the medium term.

The company has reported weak core operating performance in
1HFY16. We have revised downward FY16, FY17 and FY18
earning estimate factoring 1HFY16 performance. However,
strategic direction remains positive for Dahej project and
commencement of vanillin and antioxidant blend businesses.
We reiterate BUY recommendation on the stock with a price
target of Rs164 (potential upside 56%)

 

Keep this stock on the radar for long term play. Wait for a really bad day and grab when corrects significantly then sit tight.

 

Good point. This can be said for all stocks.

 

Thank you sir. I will buy a small quantity.

 

Expect Camlin Fine to touch Rs 150 level over next 9-12 months: Mehraboon Irani

In a chat with ET Now, Mehraboon Irani, Nirmal Bang Securities shares the rationale behind his preference for Camlin Fine Sciences.

ET Now: You told us about one idea and that was Mold-Tek Technologies. Give us some other ideas. I believe you like it speciality chemicals company Camlin Fine Sciences. Am I right?

Mehraboon Irani:We like this company for quite some time. The company has announced a disappointing set of numbers for the September quarter. This has put off quite a few investors, who had invested recently in this company. But we remain solid in our view that this is a stock, which as per our price target, could touch Rs 250 level.

From the prevailing prices, this is like more than double over the next 24 to 30 months. In the short term, the stock may though not have too many triggers. This company is in the antioxidants and speciality chemical spaces.

It is entering the vanillin market. If we look at vanillin as a commodity, the company intends to capture about 25 per cent of the global vanillin market. The company is setting up a project right now and hopefully the environmental clearance should come very soon at Dahej. So I feel that this company is moving up the value chain.

The margins for speciality chemicals segment are very good. The advantage of the overall fall in raw material cost and this vanillin thing, when it enters the segment, would help company orbiting quite differently over the next two to three months. For a patient investor, this is a stock to buy. We have a stake in this company, as an organization and personally I hold this stock. So that is a clear disclosure. We have an immediate target of 150 over the next 9 to 12 months. But if you ask me over the next 2-2.5 years, I stick to my target of Rs 250.

https://articles.economictimes.indi...hraboon-irani-camlin-fine-sciences-speciality

 

Encouraging report sir!!!!

 

Thank you sir. Buying small quantity

 

Environmental clearance is an issue in India. Any update on what the status for the Dahej plant is?