Thirumalai Chemicala fits under the framework of under-earnings.
Couple of reason for under-earnings
Fall in end product prices (P.A)
Chinese players dumping lower grade of P.A
These reason have resulted in fall in margins.
Over, last decade avg EBITDA margins have been 14%, bottom margins 4%, peak margins have been 22%. On TTM EBITDA margins are at 4%.
Now, prices have seen some recovery, Chinese dumping was also expected to stop by Q3FY24. So if prices now starts to recover we can see margins expanding going forward by FY25.
Overall, these are my thesis for investment in Thirumalai. Thanks to SOIC for the framework of Under-Earnings.
| Subscribe To Our Free Newsletter |
