Diamines & Chemicals - Rs.61.00

Incorporated in 1976, Diamines & Chemicals Ltd (DACL) is a leading producer of ethylenediamine and polamines such as diethylenetriamine, triethlenetetramine and other polyethylene polyamines. Its products are used mainly in the manufacture of pesticides & fungicides, textiles, auxiliaries, paints and adhesives, drug intermediates, paper, petroleum additives, rubber chemicals and plastics. DACL also started the manufacture Piperazine anhydrous and piperazine 65% and has become the only domestic supplier of piperazine to the pharma and other industries. It offers a range of packaging starting from 40 kg customized packing to bulk packing in ISO containers.

DACL’s manufacturing facility is situated in the Petrochemicals Complex area in Vadodra. Its huge 40,248 sq. mtr plant has in house govt. recognized R&D and fully- equipped Quality Assurance Lab. The company is also ISO 9001:2000 certified for manufacture and sale of Amine based Industrial Chemicals by internationally reputed M/s. BVQI. The Company has set up an integrated on-line information system in all major operating areas including all major offices, warehouses and stores. Last fiscal, DACL also set up a Windmill at Surajbari in Gandhidham for captive consumption, which shall help in bringing down the cost of electricity. Lately, DACL has focused its product mix on Piperazine as it is the main product used by pharmaceuticals, agrochemicals, lubricants, fuel additives etc apart from offering better profit margins. Besides it has also embarked on marketing a new product range after a detailed market survey.

The company has come out with very strong numbers for its Dec’05 qtr. Sales increased by 150% to Rs.6.15 cr. and NP spurted 64% to Rs.1.80 cr. thereby reporting an EPS of Rs.2.70 for the quarter. Considering the company’s strategy, it is estimated that DACL may end FY06 with sales of Rs.22 cr. and NP of Rs.5.50 cr. This works out to a full year EPS of Rs.8.50 on its current equity of Rs.6.50 cr. For FY07, it can report an EPS more than Rs.10. Interestingly, in spite of having negative reserves, DACL is been giving handsome dividends to shareholders and has recently declared 15% interim dividend for FY06. It may declare another 15% as final dividend later. The scrip is trading cum dividend and gives a handsome dividend yield of nearly 5% even in such a high market. Investors are recommended to buy it at current price with a price target of Rs.80 in 6~9 months.