SADHANA NITRO CHEM LTD (506642) - TURNAROUND STOCK

Today I am expressing my views on one commodity chemical company stock

SADHANA NITRO CHEM LTD (506642)

Sadhana Nitro Chem Ltd. (SNCL) is an ISO 9001:2008 company committed to producing high quality chemicals.

Since its inception in 1973, SNCL has built a strong reputation of manufacturing quality products along with excellence in service to clients worldwide. Production of intermediates under strict quality standards has been the hallmark of SNCL's success in attuning and propelling it to customer requirements.

Presently, SNCL is engaged in the manufacture and marketing of Nitrobenzene, its downstream derivatives and other intermediates for various applications in aerospace, pharma and agro, optical brightening agents, plastic additives, special fibres, epoxy resin hardeners, dyes and performance chemicals.

PLANT SETUP

With a modest 12000 TPA plant set up in a factory at Roha, 135 kms from Mumbai, SNCL commenced its operations with the production of Nitrobenzene, a heavy organic chemical utilizing the pump nitration technology of AB Chematur, a division of Nobel Industries, Sweden.

Along with its factory in Roha, SNCL set up its own government approved Research & Development laboratory housing sophisticated instruments and equipment to carry out developmental work on various downstream derivatives. Some of the intermediates developed in the R & D Laboratory have been commercialized and many are in the developmental stage.

In 1979 the company diversified into the manufacture of downstream products based on nitrobenzene viz., Metanilic Acid and Sodium Meta Nitrobenzene Sulphonate. SNCL has also set up projects for the manufacture of 3,3 Dinitro Diphenyl Sulphone, Aniline 2,5 Disulphonic acid, Aniline 2,4 Disulphonic acid.

In 1995 SNCL commissioned a 500 TPA plant to manufacture Meta Amino Phenol. This project was set up in technical collaboration with Biazzi S.A., Switzerland.

In the year 2000 a new 500 TPA plant to produce Butane Tetra 1,2,3,4 Carboxylic Acid was commissioned.

In 2002-2003, the capacity of the Meta Amino Phenol plant was enhanced to 1500 TPY.

In 2005, a plant to manufacture colour formers - performance chemicals for paper industry was commissioned. SNCL has also commissioned the first phase of its multi-purpose plant, which caters to the need-based seasonal chemical intermediate requirements of its multinational clients. The plant houses reactors, distillation columns and adequate balancing equipments, and the whole plant is flameproof. Commensurate with the upgraded requirements of its multinational customers, the multipurpose plant will be augmented with additional balancing equipments in the second phase and commercialized.

The transition of product line, with reliance on its well-equipped quality control laboratory has been the motivating force in sustaining growth and export, competing with giants in the international market, satisfying highly discerning and quality conscious clients and multinationals spread across the world.

PRODUCTS

• Nitrobenzene
• 3,3 Dinitro Diphenyl Sulphone
• Metanilic Acid
• Aniline 2,5-Disulphonic Acid
• Aniline 2,4-Disulphonic Acid
• Meta Amino Phenol
• 1,2,3,4 – Butane Tetra Carboxylic Acid
• Dibutyl Keto Acid
• Diethyl Keto Acid
• 3,3 Diamino Diphenyl Sulphone
• Sodium Meta Nitrobenzene Sulphonate
• Colour Formers
• N,N Diethyl Meta Amino Phenol

RESEARCH AND DEVELPOEMENT

SNCL is dedicated to developing new application possibilities and maintaining continuous improvement of existing applications. This is keeping in with the trend to fulfill greater customer needs world over.

In 1992, SNCL set up its own Government approved R&D Laboratory, housing sophisticated instruments and equipment to carry out developmental work on various downstream derivatives.

For SNCL, the future holds immense promise. While the forward integration continues, diversification and expansion for establishing innovative customer-designed processes is on the anvil. The adoption of rigid quality standards, customized R&D efforts coupled with flexibility of supply and speed of delivery has ensured reliability and dependability with our quality conscious and discerning clients.

Company shares are trading in BSE. Promoter holding in the company is 71.01%.

Company posted 12.05 Cr top line with over 13.5% operating margin & Net profit is 0.05 Cr in the Dec qtr. ( Company is turning around)

Stock is trading  PE of 26 which is low as compared with its peers.

Stock is trading at Rs 65.

Company is mainly doing business in the field of chemicals manufacturing & tradings. As the company products are used widely in Rubber chemical industries,Paper industries, Dyes & pesticides industries. As this sector is booming out nowadays and company is turning around in profits and operating margins. Looking at the current scenario of the sector and company perspective this stock will give handsome returns to investors.  

NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION  BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN. 

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”