Three reasons why Galaxy Surfactants should be a part of your watchlist

Any company that is in the growth phase delivering high RoE will eventually end up creating wealth for the shareholders.

The chemical manufacturing companies are on a dream run on the bourses. Galaxy Surfactants is one of the chemical manufacturing companies, which is expected to ‘make hay while the sun shines’ for the chemical sector. 

Following are the three reasons why the company should be on your watchlist: - 

1. Almost 55 per cent of the revenue mix comes from MNCs. This reflects the stickiness of the business. Galaxy Surfactants is the largest surfactant manufacturer in India that is exclusively focussed on catering to the home & personal care industry. Around 9 out of 10 Indian consumers use products that have Galaxy’s surfactants or speciality care products at least once in their daily routine. 

2. Stable EBITDA margins at above 12 per cent and higher returns ratios.

3. Positive Capex guidance is given by the management with a large part of the Capex to be spent on the speciality care portfolio.  

Any company that is in the growth phase delivering high RoE will eventually end up creating wealth for the shareholders. Growth without high RoE is meaningless and here, we have both with Galaxy Surfactants. Since 2010, Galaxy has grown- 3x in volumes, 5x in EBITDA, 6x in profits over the last decade, maintaining ROCE >22 per cent. 

The stock is up by nearly 52 per cent on a YTD basis while in one year, the stock has gained almost 132 per cent.