Pollution Board clearance granted for the phase I expansion.
2022-12-31: Pollution Board Clearance
Positives:
Company has generated huge profits in last two years.
Company is utilising almost equal amounts into expansion of PS and EPS capacities and starting a new adjacent vertical of manufacturing ABS.
This complete expansion should involve a capex of roughly 1200crs.
This is happening on a current fixed asset base of 350cr.
So we are looking at a 3x capacity with slight skew towards a better margin commodity business in 3-4 years from now.
Risks:
China is also developing more capacities and will have to see how this plays out.
However, there could be some demand crunch happening in other west due to high energy prices.
Valuations are fair and not very cheap.
[Discl: Invested]
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