Investing in Gujarat Alkalies?

Hi everyone,

I am new to fundamental investing but learning from you guys via this forum . I had a look at Gujarat Alkalies and Chemicals. Please have a look at the stock details below:

https://www.bseindia.com/stock-share-price/gujarat-alkalies--chemicals-ltd/gujalkali/530001/

It seems to me that the stock is undervalued after looking at the following numbers:

1. Cash on book: ~2000 crores of cash held by the company.
2. Very low debt: ~150 crores
3. Consistently profitable with EPS of > 20 rs. over 50 years.
4. Consistently dividend paying with a dividend yield of ~3%.
5. Market cap of ~1200 crores while its revenues per year are around 2000 crores.
6. Promoted by govt. of Gujarat and govt. entities (so relatively safe bet in terms of fraud promoters)
7. Largest producer of caustic soda in India.

I am thinking of investing in long term in this company. Can you tell me if I am missing something and if I should look for some other things?

 

This is a pure commodity play with government sometimes playing havoc with caustic soda pricing and as of today this is surplus stock positions market will hesitate to re rate the stock otherwise it is good in fundamental the problem is in scalability of this commodity buisness instead choose a speciality chemical company as per American chemical buisness report that is expected to grow at a healthy pace look at alkyl amines oriental carbon or camphor and allied products or even Aarti industries for that matter.

 

Thanks for the reply @visitkumaresh . Much appreciated!