*INEOS STRYOLUTION* CMP 1260
INEOS Styrolution India Limited is the leader and number one producer of ABSOLAC (ABS) in India. ABS is a
plastic resin produced from Acrylonitrile, Butadiene & Styrene, used for manufacturing of home appliances, automobiles, consumer durables and business machines. The company is also a leading manufacturer of
ABSOLAN (SAN) which is a polymerized plastic resin produced from Styrene & Acrylonitrile, and mainly used for products such as lightings, stationeries, novelties, refrigerators and cosmetic packing.
*Financial*
- ROE, ROCE and ROA is around 37%, 42% and 23% respectively.
- P/BV: 2.5, Face Value: INR 10, MCAP: 2250 Cr
- Forward PE - 6, Int coverage ratio: 35
- FY2021 topline was around 1,631 Cr Vs. 1,579 Cr in March 2020 up by 5% in YoY.
- FY2021 PAT was around 280 Cr Vs. (10) Cr in March 2020 (Significantly improved)
- Q1FY22 topline was around INR 455 Cr Vs. 116 Cr Vs. 637 Cr in QoQ therefore up by 305% in YoY and declined by 29% in QoQ.
- Q1FY22 PAT was around 86 Cr Vs. (20 ) Cr Vs. 161 Cr.
- Operating profit margin was near to 28% and its slightly down QoQ but continously improved in FY21 as compared with March 2020 and previous years.
- Small equity capital: INR 18 Cr and its hold by Promoters: 75%, DIIS and FIIS hold by 1.7% and 4.4% respectively.
*Opportunities*
- INEOS has diversified portfolio of Products with different industry eg. ABS, SAN, ASA, GPSS, HIPS etc. Approx 1000 Patent and around 1500 Products
- No. 1 Global Leader in Styrenic. The company provides styrenic applications for many everyday products across a broad range of industries, including automotive, electronics, household, construction, healthcare, toys/sports/leisure, and packaging.
- Virtually debt free, strong RONW: 31.5% in FY21 which is highest for the company in any FY. Current Ratio: 3 which is also fair.
- EPS is around 160 per share in FY21 which is also highest in company history.
- OPM continously improvement in YoY.
- Highly experienced board of managment and follow strong corporate governance model.
- Net operating cash flow is also sound as of FY21 it was 281 Cr at against INR 165 Cr in FY20.
- Parent company, INEOS Styrolution is the leading, global styrenics supplier with a focus on styrene monomer, polystyrene, ABS Standard and styrenic specialties.
*Risk*
- COVID uncertainty continues on the frequency, severity and duration of each wave and impact on Indian
economy in FY21-22.
View: Share 52 week high 1570 and now 1260 almost 20% corrected from their peak. Strong support 1220/1150. Good opportunity to add for Mid to Long term investor.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
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