is it deserves to become Multibagger ?

MULTIBASE INDIA LTD

Airbag business may turn it to become multibagger ?

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Multibase India owned by Dow- Corning which is a joint venture between world’s second largest chemical company Dow Chemicals and Corning Inc.Within the specialty space ,Dow corning is specialising in silicon based technology and the global leader in Silicon based specialty chemicals. Company offering more than 7,000 products worldwide

Multibase India – is a 75 % subsidiary of Dow Corning .Company’s manufacturing and R&D facilities are located at Daman.Multibase producing various silicon based products finding applications in Automotive, Personal Care, Personal hygiene, Stationery,Telecommunications and Engineering Polymers.Its thrust area is Automotive segment where company is concentrating mainly in safety products – specifically in Air bags.In India more than 75% people using passenger cars/vehicle without air bag .Currently air bags are common only in high end vehicles and the potential is very vast due to this reason.Since competition is very tough and car makers are keen to offer more and more facilities in vehicle to lure potential buyers , chances for introduction of air bags in mid segment cars are very high and buyers are also preferring this due to safety reason which is most important.In future ,we can’t even rule out the chance for mandatory air bag provisioning in passenger cars which will change the entire picture of demand scenario of company’s major product. Multibase together with its global affiliates is the global market leader for injected airbag covers has over 15 years of track records in terms of reliability and durability with material approvals at all major US, European and Asian OEM’s.Multiflex® TPO and TPE-S materials produced by the company meets all safety for driver, passenger, knee, side and curtain airbag covers.In addition to this product ,company also producing various products for fluid transportation ,sealing applications,Dash Board finishing products..etc. Other than automotive segment company’s products are finding applications in Personal care and cosmetics,Portable Electronics equipments,Houseware items,Electrical Protection systems ..etc.

At present the size of operations of this company is not very large ,but I believe ,the potential is very big .In last FY ,company reported a Sales of Rs.45 Cr and a net profit of Rs.4.5 Cr. The net profit figure reported more than 100 % jump over just previous year. In the latest December quarter,Multibase reported a sales of Rs.13.18 Cr v/s Rs.9.24 Cr and a net profit of Rs.1.44 Cr v/s Rs.0.87 Cr over same period last year.

Dow Corning Corporation ( through Multibase S A) holding 75 % stake (which is the maximum permissible % of promoter holding for a listed company in India) in this company.Another company named Dow-Corning India Pvt Ltd is also operating here which started operation before the takeover of this company by Multibase SA.But to avoid overlapping in products ,both these companies are concentrating in products with different grades.Chances for an integration between both these companies can’t rule out in future .But if it happens most probably only after a de-listing offer for the share holders of listed entity.( Since it is only a probability or speculation ,no need to take this part for valuation purpose) .

 

Whats the exact name of this Script.... No Such Script found in Moneycontrol

 

https://www.moneycontrol.com/india/stockpricequote/plastics/multibaseindia/MI51

 

https://www.moneycontrol.com/video/stocks-to-watch/here7-things-you-should-know-about-multibase-india_1272477.html

 

But its eps expectation is 7.5 rs for fy16,according to report by firscall in moneycintrol,I think its not cheap