About Company:
Asahi Songwon Colors Ltd.
is in the business of manufacturing pigments. Pigments are basically colourants, adding
colour to everything around us, namely
ink, paints, plastics, textiles, rubber etc.
The Company was incorporated in 1990 and is a leading player in the Indian Pigment
industry and intends to become a leading manufacturer of pigments around the
world. The company is in the manufacturing of the Pigment Green-7 / CPC Beta
Blue and Blue Crude, exporting substantial production to leading MNCs around
the world on account of quality of its products.
The Company is one of
the leading manufacturers of Phthalocyanine pigments (Blue and Green) and
derivatives in India and one of the fastest growing in the world within its
sector. Pigments (coloring agents that impart color) are generally classified
into Phthalo and Azo. Asahi Songwon is engaged in the manufacture of Phthalo
pigments (one of the largest categories of pigments manufactured in India)
comprising CPC Green, CPC Blue Crude and a range of Beta Blue Pigments.
Applications:
About 60 percent of all Phthalocyanine pigments are used in the manufacture of
printing inks while the rest find application in paints, plastics, textiles and
paper.
Factories: The
Company’s principal manufacturing facilities are at Padra (Vadodara),
manufacturing Blue pigment with an installed capacity of 11,400 TPA. The
Company also has manufacturing facilities at Kadi, (Mehsana) manufacturing
Green pigment with an installed capacity of 1,440 TPA.
Customers : The
Company’s Blue pigment clientele comprises global giants like DIC (Japan), Sun
Chemicals (USA), Clariant Chemical India Ltd. and BASF (Korea).
New Development:
Company has recently demerged cpc green business to Akasharchem Limited and now
Asahi Songwan color has become purely a CPC blue pigment producer company.The
demerger has resulted in providing additional shares of Akshrachem to existing
shareholders of ASCL.
Financials: In
2014 the revenue growth was 30% and achieved revenue of Rs302 crores with net
profit of Rs 14.59 crores resulting in increase of 40% in EPS in year 2013-14.
Positive Factors : 1. Profit margins are improving quarter on
quarter basis in 14-15 due to falling crude prices
2. EPS of 12 already achieved up to Q-3-14-15.
3.
Major customers are DIC & Clariant Chemicals > assured business.
4. Consistent dividend
paying record: Last year dividend increased to 35%.
5. It can be a
takeover target after demerger. Clariant & DIC both already .
have a
minor stake in the company.
6. Available at forward PE multiple of 8 which is cheap looking at
growth potential
7. Low Debt equity ratio
Buy at CMP of Rs 115-116 for long term target of 175-200
could deliver multiple returns if taken over by some MNC like DIC or Clariant
which already has minor stake in it.
Hello Mukesh sir....Pressman is flying!!!!! Fantastic moves today and the last couple of days. Any view on Grauer and Weils? Holding since January at 18.10 levels.
ReplyDeleteG&W>Don't worry hold it for longer duration nothing wrong with the fundamentals short term correction is being experienced. People who hold for longer duration make always make money in a good stock
ReplyDelete