From Specialty Chemicals to CPVC Compounding: This small-cap company is into expansion of business with Rs 25 crore capex!
The stock has a PE of 15x, an ROE of 33.40 per cent and an ROCE of 32.10 per cent.
India’s leading integrated chemical manufacturer, Epigral Ltd (formerly Meghmani Finechem Ltd), announced its expansion into Chlorinated polyvinyl chloride (CPVC) compounds. With a capacity of 35,000 TPA, the CPVC compound manufacturing plant is expected to be commissioned by Q4FY24 at Dahej, Gujarat.
In July 2022, Epigral commissioned a CPVC resin capacity of 30,000 TPA. This was followed by the company announcing a further increase in capacity to 75,000 TPA by Q4FY24, a part of which will be utilised for CPVC compound manufacturing with an additional capex of Rs 25 crore. With this expansion, Epigral will be catering to both, CPVC resin and CPVC compound customers in the country. Resistant to high heat and chemicals, CPVC resin is widely used in manufacturing pipes for industrial and domestic purposes.
India is a net importer of CPVC resin and CPVC compound demand. With Epigral venturing into manufacturing CPVC compounds, the company aims at adding to domestic supply volume, thereby contributing to bridging the demand and supply gap.
Speaking on the development, Mr Maulik Patel, Chairman & Managing Director, of Epigral Limited said: “We have been expansively contributing to this market for over a year now, which has enabled us to gather invaluable market and sector insights. Intensified growth of the construction industry in India, along with growing applications of CPVC, presents immense growth opportunities”
“This expansion is in synergy with our capex of CPVC Resin. As an aspirational and dynamic company, we are expecting more expansions in future to keep our growth momentum consistent.,” Mr Patel added.
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On Friday, shares of Meghmani Finechem Ltd gained 0.06 per cent to Rs 1,005.4 per share with an intraday high of Rs 1,025 and an intraday low of Rs 1,096.30. The stock generated multibagger returns of 165.61 per cent from the day it was listed on BSE (i.e., August 20, 2021).
Meghmani Finechem Limited (MFL) is part of the Ahmedabad-based Meghmani Group. The company is primarily engaged in manufacturing and selling chlor alkali & its derivatives with backward and forward integration facilities and is also engaged in trading agrochemical products.
The company has a market cap of over Rs 4,000 crore. According to its Quarterly Results (Q1FY24) and annual results (FY23), the company reported positive numbers and has delivered good profit growth of 18.30 per cent CAGR over the last 5 years
The stock has a PE of 15x, an ROE of 33.40 per cent and an ROCE of 32.10 per cent. Investors should keep an eye on this Small-Cap stock.
Disclaimer: The article is for informational purposes only and not investment advice.