Document 6562963

ALKYL AMINES CHEMICALS LIMITED
Result Update (PARENT BASIS): Q1 FY15
BUY
CMP
377.00
Target Price
434.00
OCTOBER 11th 2014
ISIN: INE150B01021
Index Details
SYNOPSIS
Stock Data
Sector
BSE Code
Face Value
52wk. High / Low (Rs.)
Volume (2wk. Avg. Q.)
Market Cap (Rs. in mn.)
Commodity Chemicals
506767
5.00
410.60/73.00
2045
7695.32
Alkyl Amines Chemicals Limited is a global
supplier of amines and amine-based chemicals to
the pharmaceutical, agrochemical, rubber
chemical & water treatment industries, among
others.
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS
FY14A
Net Sales
EBITDA
Net Profit
EPS
P/E
4461.01
866.06
428.81
42.02
8.97
FY15E
In Q1 FY15, Net profit jumps to Rs. 124.37 million
an increase of 40.17% against Rs. 88.73 million in
the corresponding quarter of previous year.
FY16E
5326.45
1073.06
550.40
26.96
13.98
6194.66
1266.80
667.20
32.69
11.53
The company’s net sales registered 21.98%
increase and stood at a record Rs. 1269.04 million
from Rs. 1040.35 million over the corresponding
quarter of previous year.
Shareholding Pattern (%)
Operating profit is Rs. 239.58 millions as against
Rs. 186.06 million in the corresponding period of
the previous year.
Profit before tax (PBT) at Rs. 183.92 million in Q1
FY15 compared to Rs. 130.73 million in Q1 FY14,
registered a growth of 40.69%.
1 Year Comparative Graph
The company has reported an EPS of Rs. 12.19 for
the 1st quarter as against an EPS of Rs. 8.69 in the
corresponding quarter of the previous year.
Net Sales and PAT of the company are expected to
grow at a CAGR of 19% and 41% over 2013 to
2016E respectively.
ALKYL AMINES CHEMICALS LTD
BSE SENSEX
PEER GROUPS
CMP
MARKET CAP
EPS
P/E (X)
P/BV(X)
DIVIDEND
Company Name
(Rs.)
Rs. in mn.
(Rs.)
Ratio
Ratio
(%)
377.00
384.15
278.10
610.00
7695.32
97864.60
2052.30
5957.2
42.02
19.83
24.51
46.86
8.97
19.37
11.35
13.02
2.74
1.72
1.13
1.10
80.00
100.00
35.00
160.00
Alkyl Amines Chemicals Ltd.
Tata Chemicals Ltd.
Sukhjit Starch & Chemicals Ltd
Navin Fluorine International Ltd
QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results updates- Q1 FY15,
Rs. In million
June-14
June-13
% Change
Net Sales
1269.04
1040.35
21.98
PAT
124.37
88.73
40.17
EPS
12.19
8.69
40.17
EBITDA
239.58
186.06
28.76
The company has achieved a turnover of Rs. 1269.04 million for the 1st quarter of the current year 2014-15 as
against Rs. 1040.35 millions in the corresponding quarter of the previous year. EBITDA of Rs. 239.58 million in
Q1 FY15 an increase of 28.76% against the corresponding period of last year. In Q1 FY15, net profit of Rs. 124.37
million against Rs. 88.73 million in the corresponding quarter of the previous year. The company has reported an
EPS of Rs. 12.19 for the 1st quarter as against an EPS of Rs. 8.69 in the corresponding quarter of the previous
year.
Break up of Expenditure
During the quarter, total Expenditure rose by 19 per cent mainly on account of increased Employee benefits
Expenses by 20%, other expenditure by 2%, Depreciation 4% and Consumption of Raw materials by 2% are the
primary attribute for the growth of expenditure. Total expenditure in Q1 FY15 stood to Rs. 1059.71 million as
against Rs. 887.43 million in Q1 FY14.
Break up of
Expenditure
(Rs. In millions)
Q1 FY15
Q1 FY14
%
Change
Consumption of Raw
Materials
643.28
629.84
2
Depreciation
26.92
26.00
4
Employee Benefit
Expenses
77.27
64.27
20
Other Expenditure
226.59
222.01
2
COMPANY PROFILE
Alkyl Amines Chemicals Limited is a global supplier of amines and amine-based chemicals to the pharmaceutical,
agrochemical, rubber chemical & water treatment industries, among others. Alkyl's commitment to customer
satisfaction by delivering quality products and services has helped it to become one of the world's leading amine
manufacturers. The Company is in the business of manufacturing and marketing various aliphatic amines, amine
derivatives and other speciality chemicals. It has two manufacturing sites with 9 production plants and related
utilities at Patalganga and Kurkumbh in Maharashtra. The company has an R&D centre at Hadapsar, Pune. Over
the last decade, the company had added various new product processes which were developed in the R&D to
expand its product range through in-house technology.
The first plant was commissioned in 1982 at Patalganga to make ethylamines with technology from Leonard
Process Company, USA. Subsequently, the capacity at the site was expanded to manufacture other amines with
technical know-how of Acid Amines Technologies, USA, and now hosts 2 multipurpose amines plants with a
capacity exceeding 25000 MT/annum. In 1995 it started on its Kurkumbh complex where various amines and
amine derivatives are currently being manufactured in 7 production plants with a capacity exceeding 30000
MT/annum. In the last decade, the company has added various facilities to manufacture a wide range of
speciality chemicals with its in-house developed technologies. AACL is a global supplier of amines and aminebased chemicals to the pharmaceutical, agrochemical, rubber chemical and water treatment industries, among
others. It has established a leading position in the domestic market and presence in the international market
with a reputation for reliable service and quality products.
Products
•
Aliphatic Amines
•
Paint Additives
•
Amine Derivatives
•
PU Additives
•
Fine Chemicals
•
Care Chemicals
•
Release Agents
•
Primene Amines
FINANCIAL HIGHLIGHT (PARENT BASIS)
(A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March 31, 2013 -2016E
I.
FY13A
FY14A
FY15E
FY16E
a) Share Capital
102.06
102.06
102.06
102.06
b) Reserves and Surplus
966.45
1299.80
1546.76
1794.24
Sub-Total-Net worth
1068.51
1401.86
1648.82
1896.30
a) Long-term borrowings
599.67
648.42
713.26
777.46
b) Deferred Tax Liabilities [Net]
182.77
210.02
239.42
270.55
c) Long Term Provisions
20.39
18.33
19.25
20.02
Sub-Total-Long term liabilities
802.83
876.77
971.93
1068.02
a) Short-term borrowings
734.72
705.65
684.48
670.79
b) Trade Payables
379.07
491.16
604.13
712.87
c) Other Current Liabilities
255.81
303.80
355.45
401.65
d) Short Term Provisions
78.38
104.89
125.87
146.01
1447.98
1605.50
1769.92
1931.32
3319.32
3884.13
4390.67
4895.64
1259.96
1536.90
1768.28
2007.00
EQUITY AND LIABILITIES:
A. Shareholders’ Funds
B. Non-Current Liabilities:
C. Current Liabilities:
Sub-Total-Current Liabilities
TOTAL-EQUITY AND LIABILITIES (A+B+C)
II.
ASSETS:
D. Non-Current Assets:
Fixed Assets
i.
Tangible Assets
ii.
Intangible Assets
1.07
11.10
19.76
31.61
iii.
Capital Work-in-Progress
73.21
16.93
7.79
4.28
iv.
Intangible Asset Under Development
16.06
8.96
9.41
10.16
1350.30
1573.89
1805.24
2053.06
b) Other non-current assets
0.00
29.46
33.00
35.63
c) Non Current Investments
23.43
22.60
23.05
23.74
d) Long Term Loans and Advances
148.48
113.87
102.48
93.77
1522.21
1739.82
1963.77
2206.21
a) Inventories
726.86
827.18
909.90
982.69
b) Trade Receivables
759.65
897.98
1014.72
1117.22
c) Cash and Bank Balances
154.37
228.58
281.15
337.38
d) Short Term Loans and Advances
153.26
186.81
216.70
247.04
e) Other Current Assets
2.97
3.76
4.44
5.10
Sub-Total-Current Assets
1797.11
2144.31
2426.91
2689.43
3319.32
3884.13
4390.67
4895.64
a) Sub-Total-Fixed Assets
Sub-Total-Non-Current Assets
E. Current Assets:
TOTAL-ASSETS (D+E)
Annual Profit & Loss Statement for the period of 2013 to 2016E
Value(Rs.in.mn)
FY13A
FY14A
FY15E
FY16E
Description
12m
12m
12m
12m
3658.60
4461.01
5326.45
6194.66
Other Income
13.38
20.48
34.41
46.45
Total Income
3671.98
4481.49
5360.85
6241.11
Expenditure
-3082.98
-3615.43
-4287.79
-4974.31
Operating Profit
589.00
866.06
1073.06
1266.80
Interest
-129.38
-122.42
-129.77
-136.25
Gross profit
459.62
743.64
943.30
1130.54
Depreciation
-100.34
-97.39
-116.87
-133.23
Profit Before Tax
359.28
646.25
826.43
997.31
Tax
-119.96
-217.44
-276.03
-330.11
Net Profit
239.32
428.81
550.40
667.20
Equity capital
102.06
102.06
102.06
102.06
Reserves
1026.11
1299.80
1850.20
2517.40
Face value
10.00
10.00
5.00
5.00
EPS
23.45
42.02
26.96
32.69
Net Sales
Quarterly Profit & Loss Statement for the period of 31 Dec, 2013 to 30 Sep, 2014E
Value(Rs.in.mn)
31-Dec-13
31-Mar-14
30-Jun-14
30-Sep-14E
Description
3m
3m
3m
3m
1042.50
1242.14
1269.04
1375.64
Other income
18.70
7.37
3.33
3.83
Total Income
1061.20
1249.51
1272.37
1379.47
Expenditure
-836.15
-1003.25
-1032.79
-1107.39
Operating profit
225.05
246.26
239.58
272.08
Interest
-28.36
-33.67
-28.74
-29.31
Gross profit
196.69
212.59
210.84
242.76
Depreciation
-28.45
-29.13
-26.92
-28.16
Profit Before Tax
168.24
183.46
183.92
214.61
Tax
-56.39
-63.68
-59.55
-72.11
Net Profit
111.85
119.78
124.37
142.50
Equity capital
102.06
102.06
102.06
102.06
Face value
10.00
10.00
10.00
5.00
EPS
10.96
11.74
12.19
6.98
Net sales
Ratio Analysis
Particulars
FY13A
FY14A
FY15E
FY16E
EPS (Rs.)
23.45
42.02
26.96
32.69
EBITDA Margin (%)
16.10
19.41
20.15
20.45
PBT Margin (%)
9.82
14.49
15.52
16.10
PAT Margin (%)
6.54
9.61
10.33
10.77
P/E Ratio (x)
16.08
8.97
13.98
11.53
ROE (%)
21.21
30.59
28.19
25.47
ROCE (%)
27.99
34.96
35.52
34.42
Debt Equity Ratio
1.18
0.97
0.72
0.55
EV/EBITDA (x)
8.54
5.74
8.21
6.95
110.54
137.36
95.64
128.33
3.41
2.74
3.94
2.94
Book Value (Rs.)
P/BV
Charts
OUTLOOK AND CONCLUSION
At the current market price of Rs. 377.00, the stock P/E ratio is at 13.98 x FY15E and 11.53 x FY16E
respectively.
Earnings per share (EPS) of the company for the earnings for FY15E and FY16E are seen at Rs.26.96 and
Rs.32.69 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 19% and 41% over 2013 to 2016E
respectively.
On the basis of EV/EBITDA, the stock trades at 8.21 x for FY15E and 6.95 x for FY16E.
Price to Book Value of the stock is expected to be at 3.94 x and 2.94 x respectively for FY15E and FY16E.
We expect that the company surplus scenario is likely to continue for the next three years, will keep its
growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of
Rs.434.00 for Medium to Long term investment.
INDUSTRY OVERVIEW
The Chemical Industry is critical for the economic development of our country, providing products and enabling
technical solutions in virtually all sectors of the economy. The Indian Chemical Council (ICC; Mumbai) and
analysts say that demand for chemical products continues to rise in India. “Disposable surplus income is rising in
India, and the increasing standard of living leads to growth in consumption of consumer goods, which results in
greater demand for chemical products. Per capita consumption in India for products such as plastics and paints is
still well below the global average. Despite that, the overall demand for chemicals in India will continue to
remain strong in 2014. The Indian chemical industry has always grown 1–2% above the overall GDP growth rate
in the country. This trend will continue, and the chemical industry in India will grow about 2% above the GDP
growth rate in 2014. Certain specialty chemicals, such as personal-care ingredients, additives, active
pharmaceutical ingredients, paints and coatings, construction chemicals, and water chemicals, are likely to grow
strongly. “Also, there has been an increase in activities by Indian players in these segments with respect to
expansions—both organic and inorganic.” Commodity and bulk chemicals are expected to slow in 2014 because
of lower growth in end-user segments.
Disclaimer:
This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale
of any financial instrument or as an official confirmation of any transaction. The information contained herein is
from publicly available data or other sources believed to be reliable but do not represent that it is accurate or
complete and it should not be relied on as such. Firstcall India Equity Advisors Pvt. Ltd. or any of it’s affiliates shall
not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. This document is provide for assistance only and is not intended to be and must
not alone be taken as the basis for an investment decision.
Firstcall India Equity Research: Email – [email protected]
C.V.S.L.Kameswari
Pharma
U. Janaki Rao
Capital Goods
B. Anil Kumar
Auto, IT & FMCG
M. Vinayak Rao
Diversified
C. Bhagya Lakshmi
Diversified
B. Vasanthi
Diversified
Firstcall India also provides
Firstcall India Equity Advisors Pvt.Ltd focuses on, IPO’s, QIP’s, F.P.O’s,Takeover
Offers, Offer for Sale and Buy Back Offerings.
Corporate Finance Offerings include Foreign Currency Loan Syndications,
Placement of Equity / Debt with multilateral organizations, Short Term Funds
Management Debt & Equity, Working Capital Limits, Equity & Debt
Syndications and Structured Deals.
Corporate Advisory Offerings include Mergers & Acquisitions(domestic and
cross-border), divestitures, spin-offs, valuation of business, corporate
restructuring-Capital and Debt, Turnkey Corporate Revival – Planning &
Execution, Project Financing, Venture capital, Private Equity and Financial
Joint Ventures
Firstcall India also provides Financial Advisory services with respect to raising
of capital through FCCBs, GDRs, ADRs and listing of the same on International
Stock Exchanges namely AIMs, Luxembourg, Singapore Stock Exchanges and
other international stock exchanges.
For Further Details Contact:
3rd Floor,Sankalp,The Bureau,Dr.R.C.Marg,Chembur,Mumbai 400 071
Tel. : 022-2527 2510/2527 6077/25276089 Telefax : 022-25276089
E-mail: [email protected]
www.firstcallindiaequity.com