DAIKAFFIL CHEMICALS INDIA - NEXT MULTIBAGGER ?

Today I am expressing my views on one speciality chemical stock.

DAIKAFFIL CHEMICALS INDIA LTD

DAIKAFFIL CHEMICALS INDIA LIMITED is a chemical manufacturing Company established in 1992.Company come a long way since and established a name in the chemical industry. Other than the production of chemicals, which after processing becomes a part of everyone's day to day life, Daikaffil entered the consumer arena in 1995 by converting into a Public Limited Company. Today, it has a subscribed capital of Rs. 60 Million having more than 3000 share holders, including Foreign Collaborators, Financial Institutions, Body Corporates, Non - Resident Indians and Indian public.

DAIKAFFIL has a production facility in Tarapur. The unit was established in 1992 and from a small turnover of about 1 crore that year, the unit has achieved higher sales in the range of Rs. 10 crore, with reasonable profits and reserves in the last ten years.

The main objective of the unit is to produce quality Intermediates, mainly for exports with the technical help from the overseas collaborators, so as to create cost advantages for all our customers, establish trust and confidence as a reliable sourcing unit.

In the year 1993, we at DAIKAFFIL came across the Japanese Technology. We realised the benefits of using it which resulted in low input costs as well as manual labour in the area of production and automation respectively. Hence, we decided to venture into collaboration with them, on terms of transparency, trust and full co-operation from both sides.

Besides, in all the range of production lines, the Japanese have not only provided technology free of any costs, but had agreed to buy-back certain quantities of our production for their valued clients, since the quality of the products were directly under their supervision and control. This way both the companies have been able to establish their names in the International Markets.

PRODUCT RANGE

The main products are various types of Stilbene Derivatives, Optical Brighteners for Textiles / Paper / Detergent Industries, Naphthol Grounders for Pigments and Intermediates for Pigment Red 170.

DAIKAFFIL is a large producer of OPTICAL BRIGHTENING AGENTS - OBA's, broadly used in the Cellulosic Fibers, Pulp and Paper, Detergent and Soap. The present range consists of FB 24, 71, 86, 90, 113, 134, 220 and 357, chemically known by C.I. generic names. These are generally similar to European Brands, such as UVITEX of CIBA, BLANKOPHOR of BAYER and LEUCOPHOR of CLARIANT.

MAJOR CLIENTS

Major clientele includes established names in the industry like Clariant, KIWA, ERCA spa, DAIKA (Japan) and many more.

Company is listed in BSE, trading @ Rs 75.

In Dec qtr 16, company posted topline of 7.2 CR with 0.9 CR bottomline.Operating margins is 18.5%.

Company is trading at very low PE of 11where the industry PE is around 26!!!!

As the company is manufacturing products for booming sectors like paper & pulp and other intermediate chemical sector, it will perform much better in short to medium term.

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”