update on Fine Organics by Motilal Oswal TP -3460
All plants are currently running at optimal capacity, except Patalganga-II,
where there is still some headroom for capacity ramp up. However, the
management has ruled out debottlenecking existing capacities due to safety
concerns. FINEORG is currently awaiting physical land allotment (~30 acres) in
SEZ and expects to complete the whole process before Mar’24. Although the
board has approved the company’s capex plans, the official announcement will
only be made after the land is allotted.
**In a utopian world, it would take at least six months for environment clearance **
**(EC) and another 18 months (minimum) to set up the capacities. Although the **
**greenfield capacity is expected to take care of growth for the next 10 years, we **
do not expect the growth to start until 3QFY26. The plant is expected to cater
primarily to the export market. Currently, exports account for 49% of the total
revenue for FINEORG.
Management is of high quality with great track record of execution, volume growth is challenge here as all plants are already at optimum utilization, they had high share of exports and with global slowdown margin improvement chances are less. they are always trade at premium valuation. I will like to keep this under track and waiting for better valuation to enter.
Motilal_Oswal_sees_23%_DOWNSIDE_in_Fine_Organic_Industries_Slowdown.pdf (658.1 KB)
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