Balaji amines Limited ( BAL) is a chemical manufacturer which introduced many ‘ First of its kind’ import substitute products in India through indigenously developed technology using their R&D skills. BAL is specializing in amines and specialty chemicals which find applications in the production of wide variety of products in Pharmaceuticals,Agrochemicals,Packaging,Explosives,Dyestuff ..etc. What is special with this company is its thrust on R&D to develop indigenous product.BAL put an end to the monopoly of Global chemical giants like BASF and Ashland Inc in India at least in five products viz NMP, NEP, Morpholine, 2-P, GBL, PVPK-30. Now ,company grown as the world’s largest producer of Di- Methyl Amine Hydrochloride and commanding close to 85 % market share of this product.BAL is the largest producer of methylamines and their derivatives in India with a market share of over 60%.Company’s manufacturing facilities are approved by many foreign countries which helping them to command an edge over Chinese producers in some products which export to high margin markets like EU countries.
What is making it an attractive bet at this point is both the positive developments happening in the industry as well as in the company. After few sluggish years ,prices of its products are started to show firm trend in domestic and international market. Last year company earned an income of Rs.131 cr from export alone and rupee depreciation may give extra margins to a certain extent. Next is its increasing production capacities .Recently company commissioned two new plants ,one for Di-Methyl Amine Hydrochloride and the other for Di Methyl Formamide .Production from both these plants are expected to scale up and stabilized in near months. Recently company received Certificate of Suitability from EU for their niche product PV P K 30 ( company is the only producer of this product in India) which will help BAL to export this product to regulated markets. As part of utilizing its idle land assets ,recently company started the first five star hotel in Sholapur (Balaji Sarovar Premiere) . Promoters of BAL is not actively participating in the day to day operations of this hotel and its entire operations are handed over to Sarovar group. This ensures promoters concentration in core businesses and it seems only part of an effort for asset creation.In addition to this already developed land ,company having another 300 ( Three Hundred) acre surplus land in Solapur itself.
On the financial front ,company started to report improving performance . In last FY company reported a topline of Rs.512 Cr and a net profit of Rs.31 Cr .During the latest September quarter BAL reported a turnover of Rs.161 Cr ( Rs.126 cr in same period last year) and a net profit of Rs.12 Cr ( Rs.9 Cr) .Company also distributed a dividend of 40 % .It is expected to close the full year with an EPS of Rs.14 or more.In a recent interview, promoters assures their plans to reduce the debt substantially in next two years from the current level. As an indication of their increasing confidence in the company , they are continuously hiking their stake through open market purchases in past three quarters.
Balaji Amines is a company offering many niche and monopoly or near monopolistic products and one of the few companies from the chemicals sector paying higher attention for R&D to develop new products. Even this company started as a small unit, now it grown as a threat to multinational chemical companies in many niche products.At CMP of Rs.41 ,it is trading at a one year forward P/E multiple of just 3 . Expecting decent upside from current level , hence recommending a BUY @ CMP Rs.42.Stock listed both in NSE and BSE.
Link to Corporate Video HERE
Link to Corporate Video HERE
Link to Company Website :HERE
Link to Latest Annual Report : HERE
Link to Hotel Project : HERE
