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Buy Vinyl Chemicals, target Rs 131: Equity99

"Currently, the stock is trading at 20x which we think is quite an attractive level given the bright future prospects and pedigree of Pidilite group," says Sumit Bilgaiyan, Founder of Equity99.

April 29, 2018 / 07:07 AM IST
 
 
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Sumit Bilgaiyan

Vinyl Chemicals is a Pidilite group company. It is in the business of selling various speciality chemicals mainly to textile, paints and adhesive sectors. Vinyl Acetate Monomer (VAM) was manufactured in the plant located at Mahad in Raigad Dist, Maharashtra, India and was sold all over the world. Vinyl had major share of business of this product in India.

Lately during 2007 the said plant was de-merged to resultant parent company Pidilite Industries Ltd for strategic reasons. However, the company's main focus remains in its product “Vinyl Acetate Monomer" (VAM). The VAM is now imported/sourced from various Global suppliers and distributed / traded in India.

Vinyl Chemicals India will maintain its major presence in the field of trading of various speciality chemicals in future all over the world.

Currently, the stock is trading at 20x which we think is quite an attractive level given the bright future prospects and pedigree of Pidilite group. Vinyl Chemicals will yield maximum benefits from structural changes are happening in chemical industry. Be it a production cuts from Chinese companies or continuously rising demand from Asian conglomerates.

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Vinyl Chemicals has all the ingredients to outpace the industry growth. We recommend a buy with target of Rs 131.

Disclaimer: The author is Founder of Equity99. The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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first published: Apr 28, 2018 10:06 am
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