New Year Greetings

AksharChem (India) Limited

CMP - 227

AksharChem (India) Limited incorporated in 1989, it is one of India’s leading dye intermediates, dyes and pigments manufacturing company with a installed capacity of 11,400 metric tonnes per annum (MTPA). The company is specialised in manufacturing para base ester of aniline (Vinyl Sulphone), H-Acid and Copper Phthalocyanine (CPC) Green, Violet 23 which have multiple applications in textile, inks, rubber, plastics, paints and leather industries. 

The company has state - of the - art manufacturing unit covering over 100,000 sq mt area and it is strategically located in the dense chemical belt of Gujarat

The company has globally recognised brand and most trusted suppliers of best-in-class, high performing products. It offer peace of mind to its customers with supply and quality reliability. The company is one of the leading exporters of Vinyl Sulphone, accounting for ~45% share of the country’s exports and also one of the world’s largest CPC Green pigment manufacturer with a global market share of~10%. 

Business Segments

Dye Intermediates

Dye intermediates are the key raw material used for manufacturing of reactive dyes mainly used in textile industry. The product basket of the company includes Vinyl Sulphone and H-Acid. 

Dyes

Dyes are colorants which are used to impart colours to a substance or surface such as cotton, silk, wool, paper, leather, etc. 

Pigments

Pigments are insoluble in nature and are applied as finely solid particles. They are intensely coloured and are employed to impart colour to other materials. The Company manufactures organic Pigments such as CPC Green and Violet 23, which have major applications in paint and coating, plastic, cosmetic, fabric, ink and rubber industry.

Expansion Programme

AksharChem has undertaken aggressive capex plan Rs 145 crores, it provides long term earnings visibility.  In the month of August 2017, company  has raised Rs 69 crores through QIB (Qualified Institutional Buyers) at a price of  Rs 776 per equity share  to fund the same. Of the budgeted Capex, ~Rs. 65 Crores has already been spent on enhancement of pigment capacity to 2,400 MTPA and commissioning of H-Acid facility with the capacity of 1,200 MTPA, both have commenced operations. The balance fund will be used for setting up of 12,000 MTPA of Precipitated Silica facility, its completion is expected by H2 FY 2020-21.

Precipitated Silica capex project is an important part of company' growth strategy. These are value-added products commanding better margins and will also open up a new targetable client base for company. Initially it was planned for a 10,000 MTPA plant, After considering the demand prospects and focused on reducing operating cost, company has increased the plant capacity to 12,000 MTPA. It will also help to improve valuations in future, as business transformation from cyclical to more stable earnings will change financial trajectory. 

Company has entered into an agreement to license an emerging technology which will be used in manufacture of value added precipitated specialty silica. Precipitated Silica is used intensively in the tyre, rubber industry, ceramic tiles industry, personal care products like toothpaste and tooth powder. 

Investment Rationale 

Trust and credibility: 

AksharChem exports to over 20 countries through successful execution of prior engagements, timely delivery of quality products and demonstrated technical expertise. Customer relationships are core to any business and its customers include many leading multinational corporations like, DIC Corporation, Gustav Grolman Gmbh & Co, KG, OHYOUNG Inc. and Servochem Pty Ltd. who recognise it as their ‘preferred suppliers’. The company has  history of high customer retention and derive a significant proportion of it revenues from repeat business. Even DIC Corporation Japan has become shareholder of this company due to good relationship and business satisfaction.

Strong long-term relationship with large multinational customers has enabled company to evaluate  inventory balances of materials based on shelf life, expected sourcing levels, known uses, anticipated demand and changes in product sales mix. An efficient inventory management also helps it in minimising the working capital requirement. 

As result, the Company is being able to maintain its customer base for more than two decades and products comply with all international quality standards and environment protection norms.

Post COVID -19  Increase in Demand from End-User Industries: 

Industries like textile, paint, plastic, printing ink, rubber and leather are the major end-users of dyes, dye intermediates and pigments. With improving global economic scenario, the demand from various end-user industries are surging. Factors such as increasing demand for high-grade paints/coatings, quality textile and usage of plastic in various end-user industries are ultimately going to raise the demand for dyes, dye intermediates and pigments. The textile industry is expected to grow at stable pace in the near future. Rising disposable income, increase in urbanization, high standard of living, increase in population, etc. are some of the factors which are going to help to boost the textile Industry.

Under the category of specialty chemicals, Precipitated Silica is used intensively in tyre manufacturing, ceramic tiles industry, personal care products like toothpaste. Backed by growing population and urbanization along with increase in construction activities, automobile, exports etc. this segment is expected to grow at a rapid pace in the future. 

Sustainable, compliant and strategically located manufacturing facility:

Akshar Chem plant is strategically located in the chemical belt of Gujarat, is in close proximity to raw material suppliers and downstream chemical companies. Connectivity with rail, national highway and sea-port ensures faster goods movement, lower logistics cost and business development opportunity. Its manufacturing facility has received various international registrations and affiliations, including REACH for CPC Green, ISO 9001:2015 and ISO 14001:2004. 

Company believes that quality is a key differentiator in the business and have made strong efforts to adopt uniform manufacturing standards in line with industry demands and regulatory requirements, to achieve standardized product quality for all markets. Company has adopted internationally recognised processes to ensure that minimum waste is generated per unit, treat wastes to permissible limits before disposal, emits fewer pollutants and recycle and reuse wastes to maintain healthy environment and more sustainable future.

 Experienced Promoters & Effective Corporate Governance: 

The Company, under the leadership of Mrs. Paru M. Jaykrishna, has grown tremendously and has managed to become one of the most trusted and fastest growing dyes and dye intermediate manufacturers. It continues to grow and expand by way of capacity expansion of the existing products and by adding new ones to its product portfolio. Transparency, integrity and accountability are the roots of management practice. It is environment friendly company with facilities for zero liquid discharge. It has won many prestigious awards for outstanding export performance, business excellence, etc. 

Favourable Economic Outlook post COVID-19 Outbreak : 

Currently, India is one of the major growing economies in the world. This is expected to boost the demand for dyes and pigments as they are intermediaries used in several key industries like paints & coating, textile, plastic, paper, printing ink, etc. for the manufacturing of final products. 

The shut-down of plants in China due to stringent environmental norms and anti-China sentiment around the world. It also provide a short-medium term increase in demand as this might shift the demand from China to India. AksharChem with its strong global presence, is well positioned to exploit the opportunities that are expected to arise in coming years. 

Diversification and Expansion of Product Portfolio: 

Company has worked on several new grades of Pigment Green 7 which have been technically approved by existing customers with opportunity to increase sales volume in the coming years Intensify focus on production, application profile research and development to explore possibility for new market in Coatings and Plastic industry. 

The capacity enhancement in CPC Green and investments in new products like H-Acid, Violet 23 and special grades of Precipitated Silica is going to shape future and ensure continuity of success. New plant is expected to start production within few months.

Process and Quality Excellence :

AksharChem has made significant investments in setting-up a large-scale state-of-the-art manufacturing plant and an advanced laboratory equipped with modern facilities, R&D efforts focus on continuous improvement in products and processes. Investments in process automation technologies resulted in enhanced process efficiency, product quality and reduction in human error. In a competitive global market where quality and cost matters most. Surprisingly company has not received any product rejection uptill now.

Healthy Balance Sheet: 

Even after major capex the company has a healthy balance sheet with no debt which resulted in improvement in its credit ratings.  It has completed projects like H-Acid and CPC green were entirely funded from equity and internal resources and the management feels confident of completing the rest of the projects with internal accruals as well.

Conclusion

The Profitability of the Company was affected mainly due to internal and external factors. Since last one year textile, auto, housing and construction sector were under tremendous pressure which resulted into ultimate decline of sales. Fluctuation in the exchange rate and in the crude oil affected the company adversely. In coming years, the revenue growth is expected to be driven on the back of enhanced pigment capacity, and addition of H-Acid and Precipitated Silica in its product portfolio.

AksharChem is market leader in its business segments with large world class state-of-art- manufacturing facilities. Company has excellent management team. It is debt free company with small equity base. Earning will increase significantly with improvement in business in coming quarters. It is very good investment opportunity at cmp Rs 227 for 1 year to 3 years. It can be given 10 % allocation.

Diwali Greetings

 

Beginning of New Life

Dear Blog Members,

May God bless you with good health, happiness and peace 🙏

We were not able to communicate due to personal reason since start of lockdown in the month of March.  Last two months certainly very difficult for everyone because we have never seen such tragic situation in the recent history. Initially there was a grave fear about coronavirus due to lack of information. We have seen lot of comments with doubt and uncertain future for equity investment and other businesses. We need to understand that this market slump situation is temporary  due to outbreak of coronavirus and most of the businesses are shut down during lock down period and it is for everyone. Now life is slowly returning back to normal and becoming habitual to live along with this virus but with great precaution. There is resumption in most of the businesses with certain condition. Effect of lock down will continue to weigh on economy and  equity market in coming quarters. During this period lot of stocks have touched lifetime low and several are still trading at very low level. For investors it is once in a lifetime opportunity to pick good stocks at extremely low level. Need to buy the stocks in small quantities and keep adding on every further correction. Now we will try to maintain the blog and respond your queries regularly. 

God and nature generally take tough test to make us more stronger and better than before. Please stay safe and take care of yourself and your family members. We must win against COVID-19 and achieve our life goals, it is not end but the beginning of new life.

JK Agri Genetics Ltd - Repeat

CMP = 318

JK Agri Genetics Ltd was part of JK Tyre and Industries and later  demerged into a separate public limited company in 2003. It is leading agri-biotech hybrid seed company with pan Indian presence. Its activities include plant breeding, biotechnology R&D, seed production, processing and marketing of hybrid seeds of various field crops and vegetables. The Company has a wide product range covering all the major commercial segments of the seed business and catering to the requirements of farmers in most of the agro-climatic segments.

JK Seeds Documentary

https://www.youtube.com/watch?v=VYvx225JJyg

 “JK Seeds” the flagship brand, is one of the most trusted seed brands in the country. The Company’s product range can be classified under two major categories, viz., field crops and vegetable crops:

Field crops

It includes hybrids of bajra, jowar, maize, rice, cotton, sunflower, mustard, wheat, pigeon pea, castor etc.

Vegetable crops

It includes hybrids of tomato, bhindi, chilli, watermelon, muskmelon, gourds, brinjal, radish, cabbage, sweet corn, cucumber etc.

Fodder Crops and Plant Growth Solutions 

The company has added new products to expand the portfolio.  

Production and R&D facilities

Company has a team of over 80 scientists working across 7 breeding research centres and 23 multi-location trial centers covering all agro-climatic zones of India. The research centres are located in Sriganganagar, Sonepat, Lucknow, Hyderabad, Bangalore, Dharwad and Jaipur. The facility is well equipped with Dehumidified Cold Storage, Germplasm Bank for keeping the valuable germplasm lines of the mandate crops.

Company has established its state of art biotech laboratory, with facilities for tissue culture, transgenic crop development, molecular biology, molecular breeding, radio isotope laboratory, molecular QC laboratory, insectary and large containment green houses


The company has earned name for itself amongst the farming community through its quality products.  Company has several collaborations with national and international institutes like Dr. Balasaheb Sawant Konkan Krishi Vidyapeeth, Dr. Panjabrao Deshmukh Krishi Vidyapeeth, Directorate of Rapeseed-Mustard Research, Indian Agricultural Research Institute, International Crops Research Institute for the Semi-Arid Tropics, International Rice Research Institute, Seed Vision, etc, for research and development. 

JK PASS PASS COTTON

JK Pass Pass has been very well accepted in the markets. Since it takes 3 years for a good seed variant to be commercially successful

https://youtu.be/84O8kliCXBM

JK SEEDS PADDY HYBRID JK2082

https://youtu.be/aCqHQQkvZn4

Investment Rationale

Now Indian Farmers are adopting and using more hybrid seeds due to disease and pest resistant properties. It also helps in reducing the losses and cost of production. Hybrid seeds has resulted in many advantages such as yield improvement, better quality agri output and ultimately higher profitability for farmers.

Any Genetically Modified (GM) technology in the market has to first go through rigorous research, development and testing and then seek GEAC approvals, which is a long process and takes around 5-7 years (It is the normal cycle for a seed to be commercialized). Further, developing such technology involves huge cost implications. As such, the entry of a new technology is subject to regulatory approvals and huge investments which create significant high entry barriers. 

JK Agri Genetics has achieved unique distinction of being the first Indian company for commercializing Bt Cotton with indigenous GM Technology 

JK Agri R&D team has delivered good hybrids in Cotton, Corn, Paddy, Bajra, Mustard, Wheat and vegetables. Company has spent around 7.15% of its total income on research & development during FY19.

Ethiopia has approved the commercialization of JK Bt Cotton after five years of field trails  by the Ethiopian Institute of Agricultural Research and JK Agri Genetics.  Ethiopian government has launched the New Cotton Development Strategy (NCDS) which laid out its plans for the coming 15 years (2017-2032) to make Ethiopia one of the world’s top cotton producers with annual cotton lint production of 1.1 million metric tons. Ethiopia has declared strategy to increase the  cultivation area of cotton from 80,000 hectares to 250,000 hectares in next five years and one million hectares till 2032. JK Agri  will be the only approved Bt cotton seed supplier in the Ethiopian market. It gives huge growth potential for JK Agri.

Ethiopia Govt Approval for JK Bt cotton for commercialization

https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Agricultural%20Biotechnology%20Annual_Addis%20Ababa_Ethiopia_2-11-2019.pdf

https://www.eiseverywhere.com/file_uploads/ab61a379f9e9c38b551c623a2dfa0faa_e_Recorder-Vol2_18.pdf

(refer page # 29 -30 -31)

Swiss Govt Approval for JK BT Cotton

https://bch.cbd.int/database/record.shtml?documentid=114535

It is expected that exports will pick up in coming quarters for Ethiopia.  The margins there will be much higher due to absence of price caps. Ethiopia approved commercialization of Bt cotton in order to boost yields and production. Last year, the GOE approved two different varieties of Bt cotton seeds (JKCH 1050 and JKC 1947) for commercial cultivation. There is an ongoing preparation to import the Bt cotton seeds from India for upcoming planting season.

https://apps.fas.usda.gov/newgainapi/api/report/downloadreportbyfilename?filename=Ethiopia%20Cotton%20Production%20Annual_Addis%20Ababa_Ethiopia_5-29-2019.pdf

(refer page # 2 - 4 )

Recently company has raised 50 crores fund to meet the additional working capital requirement for African business by allotment of Equity Shares and fully Convertible Warrants on Preferential basis to the promoters at Rs 484 per share. Shareholding of the Promoter Group has gone up from 23,22,207 Equity Shares (64.44%) to 33,55,264 Equity Shares (72.36%) assuming full conversion of Warrants. 

https://www.bseindia.com/xml-data/corpfiling/AttachLive/68695a5d-8920-4590-91e7-1ad1e952e82f.pdf

https://www.bseindia.com/xml-data/corpfiling/AttachLive/FD034A65_1AB6_48B5_854C_EF625137EF25_190714.pdf

JK Agri is focusing to increase the share of the vegetable segment due better margins compared to other field crops and cotton.

Domestic business of GM Cotton seed is facing headwinds due to price capping on it. Company is succeeded in commercialising the Bt. Cotton technology in 2 countries where there is no price cap on cotton seeds.  JK Agri Genetics finds fast growing Ethiopian market for its Bt cotton seed which is very lucrative proposition for the company.  

Growth possibilities in seed industry are very huge in India because very few companies are with good R&D capabilities and just 6 - 7  companies like Monsanto, JK Agri,  Kaveri, Rasi seeds, Nuziveedu, Nath-bio are having infrastructure for business scalability. Government is betting big to boost agriculture output. Indian seed industry is expected to grow  at a CAGR of 13.6% during 2019-2024, reaching a value of US$ 9.1 Billion by 2024. Advanced research and technology will change the seed industry to increase the per acre productivity. Seeds will change the way agriculture in the coming years. 

https://www.seedworld.in/pdf/SeedWorld2019-Report.pdf

Feeding a huge population in the next decade has become mammoth task for most of  the asian and african countries. Reduction in cultivation area is adding further pressure. It is not possible without increasing  agriculture output with high yield and disease resistant hybrid seeds.

JK Agri is marketing its products across 25 states through a wide network of 18 carrying and forwarding agencies, 1500 wholesalers / distributors and more than 20,000 retailers.

JK Agri Genetics has very experienced promoters and management team. It is part of the JK Group (East), which is more than 100 years old diversified business group with interests in company like JK Lakshmi Cement, JK Tyre & Industries, JK Paper, Bengal & Assam Limited and JK Fenner Limited. Company has appointed Dr. Gyanendra Shukla as President and Director (CEO) w.e.f May 23, 2019. He is having three decades working with leading multinational agri  companies like Monsanto, Bayer Corporation and Syngenta. 

Conclusion

‘JK seeds’ is well established brand name among the farming community.

Agriculture is the dominant occupation in India, which create abundant opportunities for research based companies like JK Agri which is continuously delivering high yielding, disease & pest resistant hybrid seeds through its dedicated R&D team.

Indian seed market is at point of inflection with future growth above 13% for next decade. Ethiopia is having potential of Rs 150 - 500 crore cotton seed market and it will be  gamechanger for JK Agri due to market monopoly.


Earlier we have bought JK Agri stock on 15 March, 2015 at Rs 450. It has made its life time high of Rs 1925 on 1 August, 2018. Recent market correction has given again great investment opportunity at right time to buy it at multi-year low level of Rs 318.  It can be bought with 10-20 % of allocation.  

Holi Greetings

Dear Blog Members

"May this festival of colours bring joy, success and prosperity for you"

"Wishing a very Happy Holi to you n your family"

Note - Next stock will be posted during this weekend (13 or 14 March) 

Jubilant Industries - Repeat

CMP = 126

Jubilant Industries Ltd is the flagship Company of Agri and Performance Polymers business of the Jubilant Bhartia group.  It is leading producer of Agri and Performance Polymer products comprising consumer products like adhesives, wood finishes, application polymers like emulsion polymers, food polymers and latex such as vinyl pyridine, SBR, NBR latex, Crop Nutrition, Crop Growth, Crop Protection and IMFL. Company  offers broad range of technology based products and solutions to customers in India as well as globally. 

Performance Polymers

Performance polymers are having specific properties like temperature stability, chemical stability, mechanical properties and find wide range of application as given below.

Food Polymers

Jubilant Industries ranks No. 1 in India and one of the three major global suppliers of Polyvinyl Acetate (PVA). PVA is the major raw material for making gum base for chewing gum and bubble gum.

The Product is manufactured at a modern "state of art "manufacturing facility at Gajraula (UP). All grades of PVA have been developed by extensive in-house R&D efforts and technology improvements and conform to international standards and food Grade quality. PVA products are sold under the trade name of VAMIPOL.

All grades of the product comply with the Food Chemical Codex V and US FDA. The products as well as the manufacturing facilities are accredited with ISO 9001, ISO 14001 and OHSAS 18001 certifications. Products and the manufacturing facility are Kosher certified.

Jubilant boasts of a customer profile which includes the market leaders worldwide, in the chewing gum industry. Some of these are - The WM Wrigley Jr. Company, Cadbury (The Kraft foods Company) & Perfetti Van Melle Company. Jubilant is now expanding its portfolio of products in order to have a wider offering of food grade chemicals.

Latex

Jubilant Industries ranks No. 1 in India and is No. 2 globally, for manufacturing VP Latex (Vinyl Pyridine Latex) used in dipping of automobile tyre cord and conveyor belt fabric.

Company also produce SBR latex for use in tyre cord fabric. Company is bulk suppliers of these lattices to various tyre OEM's and dippers located globally. NBR latex used in automotive gasket binding applications. VP latex products are sold under the trade name of ENCORD.

These various grades of latex are manufactured in Samlaya. The manufacturing facilities are accredited with ISO 9001, ISO 14001, OHSAS 18001 and REACH certifications.

Consumer Products

The consumer products are sold under brand name of 'JIVANJOR' and it is the second largest brand in the wood adhesive and finishing sector after Fevicol (Pidilite Industries). Jivanjor brand is focused on providing complete range of woodworking solutions ie adhesives & wood finishes, footwear adhesives and epoxy sealants to the customers with nationwide network setup.

Woodworking Adhesives

Jivanjor offers a range of ready to use wood adhesives, which are suitable for most wood joinery purposes. They are very popular and effective assembly adhesives in the woodworking industry. Water based adhesives comprise of All Rounder, Polystic Hero, and Vambond Excel. These are ready to use adhesives which set rapidly at room temperature & offer superior bond strength to users. Jivanjor also offers contact adhesive Champion which is a synthetic rubber based adhesive for exceptional fast drying & vertical lamination. Jivanjor adhesives are available in attractive packaging & in various pack sizes

Footwear Adhesives

Jivanjor offers a range of footwear adhesives suitable for most shoe components bonding purposes. The range of footwear adhesives comprises synthetic rubber based adhesives and the hugely popular two component polyurethane adhesives. The rubber based adhesives, which include RB 1001F, RB 1003, RB 1005 and FOAMBOND find huge popularity with upholsters & footwear manufacturers. On the other hand, the two component polyurethane adhesives, which include PU 2000, PU 2001, and PU 2002, are indispensable raw material for footwear manufacturers. These products guarantee superior bond strength in stringiest conditions.

Epoxy Sealants

Jivanjor offers a wide range of epoxy sealants ideal for any repair job like small crack and leakages in a very short period of time. The variants include Plumber’s seal, Mix n Fix, Fast Seal, White Putty, 10 Minute Putty, Industrial Grade Epoxy and Wet Set. These are uniquely fresh scented and soft enough to be molded into any shape, they have a very short curing time and display exceptional strength once they are fully cured. These can be sanded, drilled, sawed and painted upon to give the desired look. Jivanjor adhesives are available in an attractive packaging & in various pack sizes for convenience in use.

Wood Finishes

Jivanjor offers complete wood finishes system, stains and ancillaries for decoration & protection of wooden furniture. The wood finishes system includes Polyurethane finish, Melamine Non Yellowing finish, Melamine finish, Nitrocellulose finish & PU Alkyd finish. These systems offer exceptional fast drying properties, tough coatings and superior resistance. Jivanjor also offers a wide range of stains that can be mixed to generate unique colours to suit every desire. Jivanjor also offering ancillaries like sealers & thinners required for the purpose of successful application. The finishes systems are supported by technical team which provides intense technical training.

Agri Products

Jubilant offers a range of products in crop nutrition, crop growth regulator and crop protection areas under the brand “Ramban”, which is a widely accepted brand in the market. Jubilant is the leading manufacturers of Single Super Phosphate (SSP) in India which is also the largest selling product under the Ramban umbrella.

Crop Nutrition

This category of chemicals primarily aid in root and shoot development and increasing the crop yield. They help to provide conditioning to soil and fight against crop diseases. Jubilant “Ramban” brand is highly regarded in major parts of country by farming community for its quality, consistency and reliability.

RAMBAN SSP (Single Super Phosphate, Granule and Powder)

BENTOSULPH (Bentonite Sulphur 90%)

RAMBAN BHOO SANJEEVANI (Organic Manure)

NUTRA PLUS (Water Soluble NPK)

SULPHA GOLD (Sulphur 90% DP)

Crop Growth Regulator

The chemicals under this category primarily help to improve the strength and resistance of crops and curtail the unwanted vegetative growth, saving time and thus increasing the yield. Jubilant crop growth regulators are being used by the farmers to ensure the right growth of plant by balancing different crop life cycle stage. Jubilant offers product to increase crops growth and balance maturity.

VAM C(Chlormequat chloride 50% SL)

Power Plus 500 – Granules (Triacontanol 0.05% granules)

RIPEX (Ethephon 39% SL)

Crop Protection

Jubilant has a wide range of products that covers different aspects of crop protection. The products are used from seed planting to harvesting stage thus ensuring a secure yield for farmers. During crop complete life cycle plants are being destroyed by insects, pests, weeds & fungus.

Jubilant offers a wide range of products for protection of crops. They are primarily classified as fungicides, insecticides and herbicides.

Fungicides

Fungicides exhibit protective as well as curative action and help to control fungal diseases.

1.Vozim (Carbendazim 50% WP)

2.HEXON (Hexaconazole 5% EC)

3.Vozim Plus (Carbendazim 12% + Mancozeb 63% WP)

Insecticides

Insecticides effectively guard against chewing and sucking insecticides.

IKON (Imidacloprid 17.8%, SL )

CARTEX (Cartap Hydrochloride 4% G)

ALTER (Alphamethrin 10% EC)

CYMAX (Chlorpyriphos 50% + Cypermethrin 5%)

RAIDER (Chlorpyriphos 20% EC)

Herbicides

Herbicides to control unwanted weeds growth.

1.FIRE (Pretilachlor 50% EC )

2.CLODINOX (Clodinafop Propargyl 15% WP)

Industrial Chemicals

Sulphuric Acid H2SO4 98.4%

Sulfuric Acid (H2SO4) is a strong mineral acid. It is a basic raw material used in a wide range of industrial process and manufacturing operations.

Sodium silicofluoride - Na2SiF6 [Technical Grade]

Sodium silicofluoride is formulated for cement additives, glass industries, ceramics and allied industries. It is white amorphous powder that comprises of high grade chloride, phosphate and allied compositions.

Indian Made Foreign Liquor ( IMFL)

Jubilant Industries has been manufacturing IMFL products for the various established brands in India, engaged in liquor business. Total installed capacity is 100,000 cases/month for IMFL. With a configuration of 5 automatic/semi-automatic lines we can handle all sizes of bottles.

All lines are equipped with required Vats for storage of ENA and labeling machines which provides flexibility for bottling various sizes of IMFL. Manufacturing unit at Nira is fully equipped with state of art laboratory to support product quality and standards.

Research & Development

Jubilant's technical expertise and experience enables maximization of efficiencies and profitability. State of art R&D Centre is based in Noida with team of qualified scientists work constantly on developing customized solutions for diverse end applications .

Distribution Network 

Jubilant Industries has geographically diversified manufacturing facilities situated across India at Gajraula (UP), Kapasan (Rajasthan), Sahibabad (UP), Samlaya (Gujarat) and Nira (Maharashtra). Corporate Office is situated in Noida (UP). Jubilant consignee warehouses are located on the different  high demand locations to ensure the smooth and efficient supplies.

Investment Rationale

We had bought Jubilant Industry in August 2016 at Rs 163 and stock has given good returns in next 6 months and gone up to Rs 417 in Feb 2017. After that company was unable to perform well as expected due to unfavorable market conditions. In last 3 years, company management has taken some below given excellent decisions which has ensured the turnaround of the business. Company has posted eps of Rs 15.18 for first half of the year and it is expected to improve further in coming quarters. It is first time in last 8 years, the company is going to post positive yearly results.

Rejig in Top Management 

Rejig in top management of Jubilant Industry is a strategic move of Jubilant Bhartia Group to give more focus on business by promoters and to pass the baton to next generation so that they can prove their management capabilities by making turnaround of loss making business.

Appointment of  Priyavrat Bhartia as the Chairman of the Company.

Appointment of Manu Ahuja as Chief Executive Officer & Managing Director

Appointment of Abhishek Mishra as Company Secretary & Compliance Officer

https://www.bseindia.com/xml-data/corpfiling/CorpAttachment/2017/7/46c6c56a-4f73-406b-827c-e85ac017715b.pdf

Fresh Capital Infusion

Company has raised 42 crores capital by issuing Allotment of Equity Shares and Convertible Warrants to the promoter @ 135.95 rupees per shares. Promoters shareholding with  this preferential allocation has gone up from 68% to 75%. It has helped the company to reduce the debt and interest cost. 

https://www.bseindia.com/xml-data/corpfiling/CorpAttachment/2018/12/9f189d3d-33b3-4757-b755-03252c36ac0d.pdf

Re-Utilization of Idle Asset

Company has decided to re-commence the operations of manufacturing facility located at Kapasan, Rajasthan which was temporarily discontinued the operations due to unfavorable market conditions in 2016

https://www.bseindia.com/xml-data/corpfiling/AttachHis/7a791416-8f74-4de0-9dc9-f64395d230ca.pdf

Agri and Performance polymers business are evergreen  and huge future growth potential.  Jubilant Industry product portfolio is having several well  known established brands in their respective segment.

Jubilant management has given focus to promote consumer product brand 'Jivanjor' more aggressively to gain further market share by improving brand visibility and expanding distribution footprint pan India. The business will also focus on expanding reach in OEMs and in Project channel. A big chunk of adhesives produced are consumed by plywood, veneers and laminates sector. Indian plywood market is  growing at 7-8 percent and is expected to continue such growth in future. 


Even though woodworking adhesives market is dominated mainly by Pidilite  but Jubilant Industries has lot of scope to expand its market share because adhesive industry has been growing at good pace with increased activity in real estate, new construction & renovation.


Wood Finish market is dominated by Asian Paints in retail channel. The end users are upgrading from basic varnish and nitrocellulose finishes to more value added finishes like melamine and PU (Polyurethane) for superior aesthetics and performance. The premium segments are driving rapid market growth and products demand of Jubilant Ind is also increasing at similar rate.  


Quality wise Jubilant consumer products are meeting or exceeding its main peers like Pidilite and Asian Paints.


Performance Polymers business alone generating consistent revenue near 400 crores and now with increased focus on Agri and consumer products it will increase profit and margins. 

Conclusion

Jubilant Industries is well diversified company with evergreen product portfolio with brands like Vamipol (1st in food polymer in India), ENCORD (1st in VP Latex in India),  Jivanjor (2nd largest after Pidilite) and Ramban (3rd largest in India) as well as world leadership position in Food Polymer & VP latex segments. 

Jubilant Bhartia Group is well known for business ethics and integrity. Promoters are having excellent business track record with three listed flagships Companies - Jubilant Life Sciences Limited, Jubilant FoodWorks Limited and Jubilant Industries Limited.

Market capital of Jubilant Industry is only 179 crores with annual turnover above 600 crores.  It is excellent investment opportunity at cmp Rs 126 for both mid  term and long term ( 2 year to 5 years ). It can be bought + / - 10% from cmp with 10-20 % of portfolio allocation.