Unlisted Shares

​Revenue Growth:- In FY23, the Revenues of the company have shown a growth of 18%. Domestic sales revenue also saw an 18% YoY increase, while exports experienced a 9% YoY growth.​

Profit Margins: Net Profit Margins of the company declined, despite a surge in sales. This decline in profitability was primarily attributed to the unpredictable volatility of feedstock materials and the adverse effects of macroeconomic troubles on the demand-supply gap. FY23 NPM was 4%.

​Return Ratios: Return ratios have slightly decreased from their long-term averages due to a decline in profitability, but it is anticipated that they will rebound shortly due to the decrease in raw material prices.

Investment Thesis: Supply chain disruptions during the FY23, attributed to the Russo-Ukraine conflict and a renewed surge of COVID-19 cases in China, resulted in price volatility for key raw materials such as Bisphenol and Phenol, both critical components for polycondensate resin production. Despite the company's successful revenue growth of 18% year-on-year due to effective supply management, the substantial raw material price fluctuations, which saw an approximate 24% increase in FY23, ultimately resulted in narrower net profit margins. However, it is anticipated that improved supply stability, driven by a decline in raw material costs, will contribute to the company's profitability in the future. Considering the financial performance the stock seems to be fairly valued currently. However, with a recovery in earnings, it can reach an industry average P/E = 25 i.e. Price of  ₹540-580

Influential Presence:  The company is well associated with Asian Paints owing to a common founder base.  Apart from proven leadership skills and deep industry understanding, the heritage of directors (Dani, Vakil & Chokski (Asian Paints)) presents invaluable advantages to the company by way of credibility and influence amongst customers and other stakeholders.