Ashish Chugh, Investment Analyst & Author, Hidden Gems is bullish on Balaji Amines and Finolex Cables.
Below is a verbatim transcript of his exclusive interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.
Q: What do you think about Balaji Amines?
A: This is a Maharashtra based company. This company manufactures various kinds of amines and derivatives of specialty chemicals and natural products. This company has got three manufacturing plants; two are located close to Solapur and one plant located in Hyderabad. This company caters to a wide range of industries starting from pharmaceutical to agrochemicals. It also caters to the chemical industry and FMCG in a small way. Almost all pharmaceutical companies whether Indian or international, the major international companies, are the customers of Balaji Amines.
If you take a look at the financials of the company, for FY10 company achieved a sales of about Rs 260 crore which was up by close to 4% compared to FY09 and profit after tax was up by about 35% to about Rs 20 crore. This company has got a small equity of about 6.5 crore. In the first half of the current financial year, sales are up by close to 35% to about Rs 170 crore. Profit after tax is up by 30% to about Rs 16 crore. Earnings per share (EPS) on an annualised basis is coming close to Rs 10, the stock is traded at about Rs 40, which means that the P/E in this case is about 4. Even assuming a conservative P/E of 8, in case they don