VALUE PICK - NGL FINE-CHEM LTD.

 

About The Company

NGL Fine-Chem Ltd is a Maharashtra based company manufacturing and exporting Bulk Drugs (APIs – Active Pharma Ingredients)

The company is actively exporting its products world-wide including Europe,Asia & Middle-East.

Products

The company is mainly into Animal/Veterinary APIs & Human APIs.

The company right now has a limited product portfolio, Which they are planning to expand soon.

The Ace Investor – Value Pick

(BSE:532707) NGL Fine-Chem Ltd.

The stock is currently trading around Rs 71 with a market cap of 44 crores.

Current P/E is around 8 and Promoter Holding is strong at 62.86%.

Like our earlier picks (SKM and DYNEMIC) NGL too is a export driven company.

Exports constitute more than 70% of Total Sales.

The company has seen a sharp growth, i.e. the Total Sales for FY13 were at 55.57 crores and Net Profit was at 2.91 crores while for FY14 sales rose to 78.87 crores and Net Profit rose to 4.53 crores.

Even the OPM improved from 13.28% to 13.88%.

At current P/E of 8, NGL if compared to other Human Pharma/API stocks is cheap but there are not many veterinary dependent API/Pharma companies listed on the exchange except for Hester Biosciences which actually is a Vaccine and Pharma company for Avian,Swine & Large Animals trading at a P/E of 35.55.

NGL has been a growing company, It has shown consistent growth right from FY05, here is the Annual Results table attached below.

	Mar 05	Mar 06	Mar 07	Mar 08	Mar 09	Mar 10	Mar 11	Mar 12	Mar 13	Mar 14
Sales	10.30	11.61	19.46	12.64	24.63	28.00	35.04	36.11	55.57	78.87
Operating Profit	1.99	1.21	3.24	1.08	4.25	5.04	4.86	3.70	7.38	10.95
OPM	19.32%	10.42%	16.65%	8.54%	17.26%	18.00%	13.87%	10.25%	13.28%	13.88%
Other Income	0.51	0.51	0.12	0.13	0.08	0.17	0.49	0.13	0.19	0.09
EBIDT	2.50	1.72	3.36	1.21	4.33	5.21	5.35	3.83	7.57	11.04
Interest	0.13	0.25	0.42	0.41	0.43	0.50	0.56	0.92	1.18	1.29
Depreciation	0.24	0.42	0.51	0.59	0.76	0.78	0.94	1.35	1.93	2.32
Profit before tax	2.13	1.05	2.43	0.21	3.15	3.94	3.85	1.56	4.46	7.43
Tax	0.34	0.24	0.84	0.04	1.19	1.23	1.43	0.50	1.54	2.18
Net profit	1.78	0.81	1.59	0.16	1.96	2.70	2.42	1.05	2.91	4.53
Adjusted EPS in	5.93	1.31	2.56	0.26	3.16	4.35	3.90	1.69	4.69	7.31

As above inputs have made it clear that NGL has a lot of potential, And future outlook is for stable growth even if the product portfolio doesn't expand hugely.

Currently trading around 71, Buy this undervalued stock to play the pharma growth story for a target of Rs 200 in mid to long-term.

SKM EGG PRODUCTS EXPORT (INDIA) LTD - UPDATE

SKM EGG PRODUCTS EXPORT - Value Pick - UPDATE

SKM Egg Products Export (INDIA) Ltd was recommended on the blog at Rs 47.90.

::Link To Post:: 

Today the stock has moved to 103.45, Up 115% from our buy level.

Short-Term traders can book partial profits and long-term investors are advised to hold.

Fresh Investment should now be avoided, Readers can go for investment in latest food proxy play.
Buy another export driven company (BSE: 532707) Dynemic Products available at cmp of Rs 84.
Target of Rs 200.

::Link To Dynemic Post::

DYNEMIC PRODUCTS LTD. - RESULT UPDATE

Our latest Value Pick - Dynamic Products Ltd. (Link to recommendation) recommended on 07th of November 2014 at Rs 75.00.

Today the company has announced great September quarter results as follows.

It is now clear that the performance is sustainable as September quarter numbers have come out good.

Sales of 34.35 crores this quarter means that this is the best quarter ever for Dynemic in terms of sales, Previous high being the March 14 Quarter with sales of 32.71 crores.

We repeat our view - At cmp of below 80, Value investors should latch on to this stock for Mid to Long-Term for a target of Rs 200. Stock can touch 200 anytime in next 2 years, It can even meet this target in 6 months.

VALUE PICK - DYNEMIC PRODUCTS LTD.

About The Company

Dynemic Products Ltd is a Gujarat based company manufacturing and exporting Food Colors, Lake Colors, Blended Colors, FD & C Colors, Salt Free Dyes, Dyes Intermediates, D&C Colors & Natural Food Colors.

All the products manufactured by Dynemic meet the regulatory requirement of BIS, EU, FDA, & WHO specification, It also fulfills criteria of Kosher & Halal certification.

The company is actively exporting its products world-wide including USA, UK, Germany, South America, Middle East, South East, South Africa, Indonesia, Thailand, Philippines, China, Brazil, Argentina, Chile etc.

Product Uses

Dynemic's colors/dyes are used mainly for: Confectioneries, Beverages, Processed Foods, Bakery Products, Dairy Products, Pet Food, Medicines, Cosmetics & Personal Care products.

The Ace Investor - Value Pick

(BSE CODE: 532707) Dynemic Products Ltd.

The stock is currently trading around Rs 75 with a market cap of 81. 41 crores.

Current P/E is at 7.90 and Promoter Holding is at 42.49%.

After our last export driven pick (SKM EGG) recommended at 47.90 ::LINK TO SKM POST:: we have found this another export driven company, Whose exports form above 70% of the total sales.

The company has seen a sharp growth, i.e. the total sales for FY13 were at 85.76 crores and Profit was at 4.33 crores while in FY14 total sales rose to 116.36 crores and Profit boomed to 10.23 crores, Many a times it has been noted that such performance is a one-off and are not sustainable but for Dynemic the June 2014 quarter has shown sales of 30.45 crore v/s 32.71 crores for quarter ended March 2014 and very soon the September 2014 quarters numbers are going to be announced and if sales are anywhere above 30 crores it would indicate that performance is sustainable, We recently had a word with the management and they clearly said that the performance is sustainable thanks to booming export and increasing demand and with September results it will be very clear that it is sustainable.

Future outlook for the company looks very positive atleast for the next 3 years, A turnaround in global economy and improving consumer spending, The demand for colors have already increased sharply and are expected to increase further.

The company is setting up a plant at Dahej which will push the sales up sharply in the future to come.

As above inputs make it clear that Dynemic Products Ltd. is not an expensive stock and is a value pick considering the improving economic sentiment, transparent corp. governance record and great future outlook.

At cmp of Rs 75, Value investors should latch on to this stock for Mid to Long-Term for a target of Rs 200. Stock can touch 200 anytime in next 2 years, It can even meet this target in 6 months if earnings continue to be solid throughout the period.