Tanfac Industries Ltd - Rs 54.00
Incorporated in 1972, Tanfac Industries Ltd (TIL) is a joint sector company promoted by Tamilnadu Industrial Development Corporation (TIDCO) and Aditya Birla group. TIDCO is still holding 26% stake whereas 25% is held by Aditya Birla group of companies. Today, TIL is one of the largest suppliers of fluorine chemicals in India. It is mainly engaged in the manufacture of inorganic chemicals and fluorine based chemicals such as aluminium fluoride (ALF3), anhydrous hydro fluoric acid (AHF), sodium silico fluoride, ammonium bifluoride, sulphuric acid, potassium fluoride, gypsum, cryolite and various chemicals. These products have vital applications in industries as varied as aluminium smelting, petroleum refining, refrigerant gases, steel re-rolling, glass, ceramics, sugar, fertilizers, heavy water, etc. Besides it also produces organic fluorides & speciality fine chemicals which are used as intermediates in the manufacture of pharmaceuticals and agrochemicals.
TIL’s manufacturing plant and facilities are spread over 60 acres in the chemical complex of SIPCOT at Cuddalore near Pondicherry. It has technical collaborations with Davy Process (formerly BUSS AG), Switzerland for ALF3 and Chenco, Germany for hydrofluoric acid. Currently, company has an installed capacity of 15600 tpa each for ALF3 & AHF, 75000 tonne for sulphuric acid and 3400 tonne for specialty fluorides. It also has an ISO 9001, 14001, & TPM certification. Being an Aditya Birla group company, Hindalco is its major customer apart from NALCO. Besides, nearly 30% of the production is being exported to to countries across the globe including USA, Europe, Australia, New Zealand, Singapore, Thailand and Middle East. Notably, aluminium industry worldwide has been growing at a fast pace and this has led to a significant improvement in demand for aluminium fluoride. Since 60% of company’s revenue comes from ALF3, this augurs well for TIL. Further, it is expected to maintain its growth momentum in coming years as it has undertaken new market initiatives, new products launch, capacity expansion of existing production and cost savings from process improvement schemes. In the current year, company is planning to launch four new value added products. Meanwhile, one of its projects has been already registered under CDM and company is expected to start trading in carbon credits from this fiscal, which will generate additional revenue.
Financially, after making a strong turnaround in FY07, TIL maintained its growth for FY08 as it registered 35% increase in sales to Rs 165 cr and 80% jump in PAT to Rs 12.25 cr thereby posting an EPS of Rs 12. It declared 17.50% dividend for FY08. Importantly, company was able to improve its OPM in FY08 to 12% against 5% in FY06. Even for June’08 quarter as well, it reported stunning performance. Sales grew by 50% to Rs 47 cr and net profit shot up by 150% to Rs 3.30 cr. Accordingly for FY09 it may clock sales of Rs 200 cr and profit of Rs 13.50 cr i.e. EPS of Rs 14 on equity of Rs 9.98 cr. Besides, company has significantly reduced its total debt to Rs 16 cr from Rs 42 cr in 2005. It is currently available fairly cheap at an EV/EBIDTA of less than 3x times. Scrip can shoot up 50% as and when market sentiment improves. Moreover in case Tamilnadu government opts for divesting its stake, the share price can shoot up sharply.
No comments:
Post a Comment