A possible Multi-bagger
(Disclaimer: I am not entering NOW. But will surely be waiting. Wait along with me if you have patience. And I am OK if I don’t get a chance at all. Don’t buy at wrong prices and experience pain. Your loss hurts me more than my own.
Disclaimer: 2: I am not a SEBI registered Analyst, nor intend to be one in near future. I am just sharing my study. Take your own investment decision)
CMP: 905 (don’t buy now, buy zones mentioned below)
Industry : Speciality Chemicals
Application : their Chemicals have application into pharmaceutical, agrochemical, material science, coating, high performance photography, additive, and oil and gas segments of the chemical industry
Business Models: The company has three business models:
1. Large scale manufacturing of intermediates and specialty chemicals,
2. CRAMS (contract research and manufacturing services) and
3. Contract manufacturing.
Best buying zones are 842, and Next Demand zone only at 712, 560
Target nothing less than 10K in a decade time.
Story: (incase the story section is in bad format to read, check the attached screenshot.)
Year Employee Count Facilities Revenues INR in Millions Other news
2013 10 1 - Manufacturing No Data/sales SAP B-1 Implemented
2014 50 1 - Manufacturing No Data/sales
2015 100 2 - Manufacturing No Data/Sales
2016 200 2 - Manufacturing No Data/Sales Signature Product 4-MEP production started
2017 300 2 – Manufacturing No Data/Sales
2018 300 2 – Manufacturing 1000 Another signature product OTBN production started.
2019 400 2 – Manufacturing
1 – Warehouse 2000 new Signature product MMBC added
2020 500 2 – Manufacturing
2 – Warehouse 3000 R&D units added in both the manufacturing units and Received recognition from DSIR at Manufacturing facility 1
2021 700 2 – Manufacturing
2 – Warehouse 4500 new Signature product BFA added
4-MEP, OTBN, MMBC, BFA
The company is the sole manufacturer in India of chemicals such as 4-(2-Methoxyethyl) Phenol (4MEP), 3-Methoxy-2-Methylbenzoyl Chloride (MMBC), Thiophene-2-Ethanol (T2E), Ortho Tolyl Benzo Nitrile (OTBN), N-Octyl-D-Glucamine, Delta-Valerolactone and Bifenthrin Alcohol.
As it is a relatively new company, it is having the latest and better technology available for research.
Face value is 10 rupees. So technically room available for stock splits.
Mission statement itself says: Their target is to enter into the market only they can contribute significantly.
The company is the largest manufacturer of 4MEP, T2E, NODG and HEEP products in the world by volume
Large promoter share holdings of 87%. That is BIG.
ROE of 38 and ROCE of 30
EBITDA margins are improving and are standing at 25%+ with 18% PAT margin.
Debt equity is well in control
Relatively new company in the chemical industry. Incorporated just in 2013 and Sales started only in 2018
PE ratio (103) is three times higher than the industry PE of 31.
As there is very huge promotor holding, there may be obvious possibility of diluting it in future in good times. One should be ready to accept this.
Debtors turnover ratio stands 4.5 (which is better than many big companies out there but has LOT to improve.
Recorded Negative Cashflow for the first time in the last fiscal year.
The below details are sourced from its Red Herring Prospectus (Document that is released for IPO). Which if you want can find here for Aether: https://www.sebi.gov.in/filings/public-issues/dec-2021/ae...
Differentiated portfolio of market-leading products.
Focus on R&D to leverage the core competencies of chemistry and technology.
Long-standing relationships with a diversified customer base.
Synergistic Business Models focused on Large Scale Manufacturing, CRAMS and Contract Manufacturing.
Focus on Quality, Environment, Health and Safety (QEHS).
Strong and consistent financial performance.
Experienced Promoters and Senior Management with extensive domain knowledge.
Attached the RHP