Shree Pushkar Chemicals & Fertilizers : 539334 : Newly Listed Company into specialty chemicals Buy at CMP of Rs 128-130 for long term : 2 year target of Rs 300

Shree Pushkar Chemicals & Fertilisers Ltd. Founded in 1994 is an established market leader in the manufacture of Dyes & Dyes Intermediates. fertilisers, Sulphur Base Acids, Animal Feed Additives Manufactured,  Reactive Dyes, Acids, Sulphuric Acids, Oleum Acids, Chloro Sulphonic Acid. It also Exports to world’s leading dye manufacturers Huntsman Corporation in USA.

Financials :

In 2015-16 company achieved turnover of 248 crores with NP of Rs 22.30 crores on equity base of 30.22 crores resulting in EPS of Rs. 8.5.

Q-1 OF 206-17 Company achieved turnover of approx 64 crores with NP of 6 crores.Though –Q-1 was a flat performance but NP margin saw improvement .

Investment Positives :

1.Company has been growing at CAGR of 14% over last 5 years.

2.Debt free company

3.Company has recently done capacity expansion of vinyl Sulphone from existing 2700MTA to 3700MTA to meet growing demand from India. Recently Vinyl sulphone prices also have started going up and seen 40% increase. Major factors driving increase in Vinyl sulphone prices is due to strict environmental laws in China that has resulted in closure of major producers of Vinyl Sulphone. Due to price increase and increase in demand many dye stuff and dye intermediate companies profitability has increased in past and set to improve further.Kiri Industries,Bhageria Industries, Aksharchem and Asahi Songwon prices have recently gone up in very short span of time and is rising further.

Shree Puskar chem’s 70% revenue comes from dye and dye intermediates and going forward it is set to deliver improve financial performance on year on year basis.

4.At CMP of Rs 128 stock is available at PE multiple of 14-15 .2016-17 it can deliver EPS of 11-13 and. Companies in similar business are already enjoying very high PE of 20+ that should and stock can get rerated from here on.

Long term investor can invest at CMP of Rs 128-130 for 100% kind of return in 2 years.