Recently i had spoken with couple of issues from management and here is the update
1. Current year there is inventory buildup 6.9 crores in 2015 why are you looking for setting up 3rd plant
Reply: The stock is mainly of Dye Intermediates finished goods due to slow market of Textile dyes. Please note that if market is slow right now it will not remain same always and we cannot stop from expansion and growth phase. Please note that Synthetic colors are stable less expensive than natural colors and much in demand so right now there is no threat to the Company.
Company skipped dividend because it plans to complete unit3 phase1 expansion in the current FY.
I calculated the Inventory Turnover ratio and it is coming > 2 indicating that company is able to generate 2rs sales for every one rupee of inventory. Management is also very good and a small debt on books with mouth watering valuation.
There is a good demand for synthetic colors from nestle,pedigree etc..
Source: Previous 4 years annual report.
Disclosure: Bought today @ 40 levels and increased my holding
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