Tuesday 18 July 2017

VALUE PICK: INEOS Styrolution India Ltd


MCAP: 1700 Odd Crores.
CMP: Around 995/-
CURRENT P/E: Around 25.

NEGATIVE: Slow Growth.
POSITIVE: Sectoral bullishness.

INEOS is one of the two main manufacturers in Indian market for ABS (Acrylonitrile butadiene styrene) The other company is Bhansali Engineering Polymers Ltd. INEOS is a MNC and one of the world leaders in Specialty Chemical, Polymer space.

INEOS and Bhansali both are having a capacity of 80,000 MT each.
While demand for ABS in INDIA is at 2,75,000 MT and is expected to grow by close to 15% CAGR in the medium term. Bhansali recently announced the bull market Expansion plans to take the total capacity to 1,37,000 MT in the short-term and to 2,00,000 MT in the long term funding it with internal accruals.

If the sector is getting hot, We would expect this MNC to manage their business better and focus on it as well.

INEOS promoters hold 75% stake in the company, Making it a potential MNC delisting candidate.
Valuations wise, INEOS is cheaper compared to Bhansali.

FY17 full year nos:-

When the markets are clocking all time highs, specialty chemical and this sector has been buzzing. INEOS looks like a good opportunity which is not over-valued in this market. A 40% rally from CMP will take INEOS close to 1400 at a valuation of close to 35 P/E against FY17 earnings. With FY18 expected to be better for the sector.

Technically, INEOS is having a breakout on the daily charts closing above 1000. Its a 5 years cup and handle breakout on the charts. :-

Note: The above is not a research report but information as available on public domain and it should not be treated as a research report.

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”

Disclosure: It is safe to assume that i might have INEOS Styrolution India Ltd in my portfolio and hence my point of view can be biased. Readers should consult their financial advisory before any investments.


  1. Excellent and cheap stock in overvakued market.with expected good results it may zoom to 1300 easily.BEPL already came with stellar numbers..weekly closing above 1000 will triggwr sharp rally.

  2. poor nos posted by INEOS.... without any proper explanation by the management... !!!

  3. sir, pls share your view on LEEL ELECTRIC. After Rs 1550 Cr.......! cash reciept from Havells from CD bussiness sale.
    LEEL Electric is now a debt free company with a turnover to equity ratio over 50, EPS over 30 on the most conservative side ,book value over 500, with a pledge free promoter holding off over 55% growing at a CAGR of almost over 30% and customers being all the leaders of the industry and that too in a highly capital intensive manufacturing facilities and with a cash rich balance sheet, much more.....all this at a price of 180 per share or less than a market capitalisation of 720 crores.. AWAITING YOUR COMMENT

    1. Your view on LEEL ELECTRIC PLEASE. sir,Still the share is avaliable at a deep discount value price, As It has recently sold its consumer durable bussiness to Havells around 1550 Crores. Its book value is above 400 and cmp is 270. It's peers which are recently listed DIXON AND AMBER WHO ARE CONTRACT manufactures of white good consumer durable products are trading at very very high PE multiples (above 60 PE). flipkart has recently entered to sell the AC products manufactured by LEEL under the brand MARQ. LINK GIVEN BELOW.. ITS A GREAT BUY at cmp .The company is debt free and cash rich. pls offer your view.