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In-house R&D, niche chemistry with limited competition!
One of the key USP at FOIL is its R&D capability and technical prowess in plant designing and consequent capacity addition. FOIL claims to have increased its capacity at 1/8th cost of best available technology. Therefore, such high capital costs of imported technology coupled with long gestation period of customer approvals deter a new entrant and provide a strong entry barrier for the industry. FOIL is the largest manufacturer of oleo-chemicals based additives in India and one of the only few in the world thereby operating in the limited competition landscape.

Valuation and Outlook
Available at 3.0x MCap/sales & 30x P/E (FY18E); recommend SUBSCRIBE
At the upper price band of | 783, FOIL is available at MCap/sales of ~3.0x and P/E of ~30x on FY18 numbers (annualised given 9MFY18 numbers). FOIL possess healthy balance sheet with Net Debt: Equity at 0.1x, average NWC days ~70 days and robust return ratios profile (FY17 RoE at 25%). We advise SUBSCRIBE on FOIL for long-term perspective .

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