NOT A BUY RECOMMENDATION
*Manali Petrochemicals* - _Ready for Take-off_
CMP ā ā¹ 35
*TP ā ā¹ 70 _(100% Upside)_*
šÆM O N O P O L Y. P R O D U C T. SELLING PRICE RISE BY ANOTHER 10% IN NOV
*Lifetime Best Q2*
š EBITDA spurts 546% QoQ and 135% YoY
š PAT zooms 1000% QoQ and 265% YoY
š·ļø Manali Petrochemicals is only integrated Propylene Glycol (PG) manufacturer in India
*Rationale for Recommendation:*
šÆ Capacity expansion by 48000 TPA from current 22000 TPA to 70000 TPA at an estimated cost of just Rs. 150cr
šÆ Project to be handled by in-house redesigning the current facilities to ensure cost effectiveness and most prudent budgetary practices
šÆ Operating at 100% capacity utilization
šÆ Current demand for PG in India is 100000 TPA, 75% of which is imported.
šÆ *_Channel check suggest PG prices are at 15 years high_*
šÆ EBITDA margins are expected to expand further
šÆ H2FY2020 PAT is estimated to be in excess Rs. 75cr
šÆ Trading at just 4.5x FY22E EPS and 3xFY23EEPS
š„ *Manali Petro posts strong results for Q2FY2020* š„
š Revenue Rs. 216.7 Cr (147% QoQ, 13.9% YoY) vs QoQ Rs. 87.7 Cr, YoY Rs. 190.4 Cr
š Rs. 216.7 Cr (147.1% QoQ, 13.9% YoY) vs QoQ Rs. 87.7 Cr, YoY Rs. 190.4 Cr
š EBITDA Margin came at 17.2% vs QoQ 6.6%, YoY 8.3%
š Adj. PAT came at Rs. 31.1 Cr vs QoQ Rs. 3.1 Cr, YoY Rs. 11.7 Cr
*The stock is trading extremely cheap at just 4.5x FY22E EPS and 3xFY23EEPS even with very conservative estimate*