Dont be confused mates. The situation is simple for ADI Finechem.
Their competitive advantage comes when crude oil prices are high as they make their product from edible oil waste while their competition makes the same product from crude.
So now when Crude is at multi year lows and has fallen from $100+ (this was when ADI was flying due to competitive advantage) to $40-$44 range…its has completely killed their product competitiveness internationally.
Tough days ahead for ADI…because with China’s slowdown, Iran sanctions lifted, US Shale boom…..looks like Crude will be in 30-50 range for sometime.
Question is whether ADI can sustain this low crude environment. It will become interesting if the stock price goes to 100-150 odd and if Crude can rise to 75-85 range.
Cheers
Neil Bahal
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