Balaji Amines Ltd - Rs 72
Balaji Amines Ltd (BAL) was setup in 1988 for manufacturing of aliphatic amines in India to cater the growing requirements of value based specialty chemicals. Since then, it has emerged as the leading producer of methylamines, ethylamines and their derivatives. Importantly, BAL is among the few handful manufacturers across the world as amine manufacturing technology is a closely guarded process. And ironically company is using indigenously developed technology i.e. without any technical foreign collaboration. And remarkably, its one of the lowest cost producers of methylamines in the world. Today, it also produces specialty chemicals which are import substitutes like Morpholine, hydroxylamine, N-Methyl Pyrrolidone etc and few natural products (herbal extracts) such as solanesol, calcium sennosoid, coleus forskohlii, camptothesin etc. Company’s products find application in various important industries including like pharmaceuticals, agro chemicals, water treatment, rubber chemicals, dyes & pigment, paper, explosives, rocket fuel oil refineries, photography etc. Besides, Morpholine - which is being manufactured by company for the first time in India through indigenously developed technology, finds extensive application in manufacture of corrosion protection compounds used in refineries, ships, steel plants etc. Being ISO 9001-2000 certified, company’s product are very well accepted in international market and it derives nearly 15% of total revenue from export to several countries such as UK, USA, Canada, Latin America, Germany, Italy, Middle East, South Africa, France, Brazil, Mexico etc
Presently, BAL has two manufacturing facilities - one at Sholapur-Maharashtra for amines & derivatives and second one at Hyderabad – AP for natural products. On the back of regular expansion, it has capacity of 18000 MTPA of methyl amines, 3000 MTPA of ethyl amines & 13000 MTPA of intermediates. Last fiscal, company has successfully enhanced capacities for methyl amines, ethyl amines, NMP and other derivatives by revamping the production facilities. It has strong presence in domestic market with major clients from pharma sector including Aurobindo, Aventis, Clariant, Dr. Reddy’s, Glaxo, Merck, Ranbaxy, Sun Pharma, Wyeth, Wockhardt, etc. Earlier it also entered into a long term strategic arrangement with BASF for supply of N-methyl-2-pyrrolidone. Notably, company is the only manufacturer for Morpholine and N-methyl-2-pyrrolidone (NMP) with a monopoly status in India and hence, has of late set up a separate dedicated plant at Solapur to manufacture them with a capacity of 2000 MTPA & 3000 MTPA respectively. Company has also established a hydrogen plant in house to cater to the needs of captive requirement and is successfully running chlorine chloride plant (solutions & solid) with a capacity of 5000 MTPA. Last fiscal it also put up a plant for manufacture of Co-Enzyme Q10.
Meanwhile, BAL boasts of having two state-of-the-art R&D centers at both its plants. Infact, its Hyderabad R&D unit which has is approved by Department of Science and Technology, Govt. of India has identified some new products under natural products and processes are being developed. It has also successfully carried out R&D activities in process automation of various plants to reduce the consumption of raw materials and utilities. Financially, company has been reporting very encouraging nos and has recorded 45% growth in sales to Rs 145 cr and 70% jump in PAT to Rs 11.80 cr for the first six months ending Sept 2008. Accordingly it is expected to clock a turnover of Rs 260 cr and PAT of Rs 13 cr for FY09. This leads to an EPS of Rs 20 on equity of Rs 6.50 cr. Incidentally, BAL is not affected by rupee appreciation or depreciation as its raw material import is almost equivalent to export revenue. Despite BAL being vulnerable to commodity price cycle still it is expected to improve its profit margin going forward due to various initiatives taken by the company. Notably, promoters have bought 2% stake from open market in the last three quarters. Investors are advised to buy at sharp declines with a price of Rs 120 (i.e. 50% appreciation) in 9~12 months.
Presently, BAL has two manufacturing facilities - one at Sholapur-Maharashtra for amines & derivatives and second one at Hyderabad – AP for natural products. On the back of regular expansion, it has capacity of 18000 MTPA of methyl amines, 3000 MTPA of ethyl amines & 13000 MTPA of intermediates. Last fiscal, company has successfully enhanced capacities for methyl amines, ethyl amines, NMP and other derivatives by revamping the production facilities. It has strong presence in domestic market with major clients from pharma sector including Aurobindo, Aventis, Clariant, Dr. Reddy’s, Glaxo, Merck, Ranbaxy, Sun Pharma, Wyeth, Wockhardt, etc. Earlier it also entered into a long term strategic arrangement with BASF for supply of N-methyl-2-pyrrolidone. Notably, company is the only manufacturer for Morpholine and N-methyl-2-pyrrolidone (NMP) with a monopoly status in India and hence, has of late set up a separate dedicated plant at Solapur to manufacture them with a capacity of 2000 MTPA & 3000 MTPA respectively. Company has also established a hydrogen plant in house to cater to the needs of captive requirement and is successfully running chlorine chloride plant (solutions & solid) with a capacity of 5000 MTPA. Last fiscal it also put up a plant for manufacture of Co-Enzyme Q10.
Meanwhile, BAL boasts of having two state-of-the-art R&D centers at both its plants. Infact, its Hyderabad R&D unit which has is approved by Department of Science and Technology, Govt. of India has identified some new products under natural products and processes are being developed. It has also successfully carried out R&D activities in process automation of various plants to reduce the consumption of raw materials and utilities. Financially, company has been reporting very encouraging nos and has recorded 45% growth in sales to Rs 145 cr and 70% jump in PAT to Rs 11.80 cr for the first six months ending Sept 2008. Accordingly it is expected to clock a turnover of Rs 260 cr and PAT of Rs 13 cr for FY09. This leads to an EPS of Rs 20 on equity of Rs 6.50 cr. Incidentally, BAL is not affected by rupee appreciation or depreciation as its raw material import is almost equivalent to export revenue. Despite BAL being vulnerable to commodity price cycle still it is expected to improve its profit margin going forward due to various initiatives taken by the company. Notably, promoters have bought 2% stake from open market in the last three quarters. Investors are advised to buy at sharp declines with a price of Rs 120 (i.e. 50% appreciation) in 9~12 months.
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