Source: http://rakesh-jhunjhunwala.in/did-you-miss-100-gains-offered-on-platter-dont-miss-the-next-100-gains/
Timestamp: 2019-04-18 14:46:10+00:00

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– Did You Miss 100% Gains Offered On Platter? Don’t Miss The Next 100% Gains!
Camlin Fine Sciences came to our attention in August 2014 when Darmesh Kant of IndiaNivesh recommended a buy. Dharmesh’s research was impeccable. He emphasized that Camlin’s finances were in ship-shape condition. In the four year period from FY’10 to FY’14, the revenue CAGR was 30%, ROE CAGR was 23%, PAT CAGR was 45% and cash accruals CAGR was 34%.
Dharmesh opined that Camlin was at an inflexion point for rapid growth in coming years.
Well, since then, Camlin Fine Sciences has surged nearly 100%.
Fortunately, Camlin Fine Sciences is still a micro-cap with a market capitalisation of only Rs. 989 crore. It recently announced the decision to set up a new manufacturing facility at Dehaj in Gujarat with an investment of Rs. 193 crore to manufacture 9,000 tonnes of Hydroquinone and 6,000 tonnes of Vanillin. The new plant would help Camlin become a major supplier of Diphenol and Catecholand Vanillin as well as its derivative and down-stream products. The project is expected to be commissioned in September 2017.
A number of stock wizards are now waking up to Camlin Fine Sciences’ potential.
Camlin Fine reported net sales of Rs.558.3 crore in FY’15, an increase of 9.8 per cent. However, EBIDTA increased 36.5 per cent driven by better realization and contained raw material costs. Consolidated PAT for the year stood at Rs.55 crore, an increase of 91.6 per cent y-o-y.
We expect EBIDTA margin to improve from 15.1 per cent in FY15 to 22 per cent in FY19 on the back of increasing contribution from higher realization products like Vanillin and Antioxidants Blends.
We believe global leadership position in key chemicals, moving up in the antioxidant value chain and entering into the lucrative vanillin market with potential 24 per cent market share and expansion in EBIDTA margins are key value drivers for the stock performance over the medium term.
Camlin announced the setting up of a manufacturing facility at Dahej SEZ, Gujarat at an estimated cost of Rs. 191 crore. The land for the same has been acquired for Rs. 8 crore. The new facility would have an installed capacity of 15000 MT (HQ – 9000 and Catechol -6000 MT). The Catechol, thus produced would be further used for vanillin production (capacity of 6000 MT). The fully integrated project would enable Camlin to command cost leadership and, thus, enable it to enter the lucrative vanillin market. The company expects the project to be commissioned by September, 2017 and funding to be done through debt-equity ratio of 70:30.
D. D. Sharma of Risk Capital Advisors recommended a buy on similar logic as that of the other experts (see video).
So, given the unanimity of opinion amongst the savvy investors, we have to keep a close watch on Camlin Fine Sciences to see whether it does deliver all that is expected from it!
Good article as always ,but I would like further inputs, comments by dear knowledge members on this stock already endorsed by many respected Gurus , before making any opinion on this stock.
Well, If 900 cr is a Micro Cap then what is a Co having 100 cr Mcap?Super super super Micro cap?
Failed to understand the valuations! At 900 cr can Camlin Fine be called Micro Cap?
What exactly is the name of the company? Camlin Fine Sciences, Camlin Life Sciences, Camlin Fine Chemicals – all three are used in this article at different places.
Regarding valuations, stated value may start accruing from 2017 after commencement of new production capacity, its a long way, currently appearing slightly blown up, and it wont go one-way up in next 15 months. It will offer buying opportunity when there are expected broader market shakeouts.
It is Camlin Fine Sciences and is corrected throughout.
70/30 funding with debt/equity for capacity expansion. Is the company mindful of the impact on ROCE it will have? Is the mgmt confident to recover from this decline in future? What about internal accruals by the way – why is the company not funding CAPEX with that? Or does the company not have any?
No juice leftleft. Article posted for the sake of it.

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