Fine Organic is a potential multibagger stock: Saurabh Mukherjea

Discussion in 'Must-Read Interviews, Articles & News Items' started by Arjun, May 16, 2021.

  1. Arjun

    Arjun Chief Executive Officer (CEO) Staff Member

    Mar 19, 2015
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    Saurabh Mukherjea of Marcellus Investment Advisers has revealed that Fine Organic Industries, a mid-cap with a market capitalisation of Rs 9,500 crore, is one of his favourite stocks.

    The stock forms part of the famous Little Champs portfolio.

    Fine Organic is the largest player in the oleochemical industry in India and among the top six players globally. Oleochemicals are a substitute for petrochemicals and are manufactured from natural sources. The chemical is used in several industries such as plastics, packaging, foods, cosmetics, pharmaceutical, paints, rubbers, etc. Food and polymer additives alone contribute 60-70 per cent of the company's revenues.

    Saurabh explained the merits of Fine Organic in a succinct manner.

    "We have been steadily building up our positions further in Fine Organics over the last year or so. They make emulsifiers and anti-fungal agents that go into breads and baked products, which we all consume. It is the largest player in that market of supplying food emulsifiers and anti-fungal agents for baked products. They also have a very strong presence in supplying specific inputs that to into the production of aerated drinks," he stated in an interview to ETNow.

    Saurabh pointed out that oleochemicals have strong entry barriers, as these green additives have a long gestation period for product approvals. Besides the above entry barriers emanating from the inherent nature of the products and processes, Fine’s senior management has also been able to build strong relationships with its clients. This has been done by successfully leveraging Fine’s R&D skills to address the customer needs (the new product development pipeline of Fine is driven by the marketing team of the Company) and increasing the number of products sold to a single customer over the years thereby increasing the customer’s stickiness, he added.

    More details about Fine Organics is available at the Marcellus website.

    "My reckoning is beyond the domestic monopoly that gives them 30-35 per cent ROCEs and consistent growth of 20 per cent in their business, it is a powerful export franchise as well. The Indian promoters have built this up with lots of hard work over 50 years. This could potentially become a multibagger play in our portfolio," he concluded.

    See Also: Saurabh Mukherjea Recommends Two Top-Quality Mid-Cap Stocks Which Can Give 10x Multibagger Gains
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