Fundamentals

INDIA GLYCOLS LTD.

Ticker: 500201 BUY: Rs.416.95
Target: Rs.465

India Glycols Ltd. is one of the leading manufacturers of glycols, ethylene oxide derivatives, ethyl alcohol, natural gum and industrial gases. It earns 35-40% of its revenue from exports. Its products are used across industries like oil and gas, agro-chemical, textiles, food processing, paper, pulping, paint and many more. A major turnaround in profits and debt repayment was seen since FY17. The growth in FY18 was led by volume growth. Also, in Q1FY19, the revenue was up by 11 per cent YoY to Rs 764 crore. Its EBITDA almost doubled to Rs 112 crore from Rs 54 crore. The EBITDA margin stood at 15 per cent as against 8 per cent in Q1FY18. The PAT jumped exceptionally by 425 per cent to Rs 42 crore from Rs 8 crore. Considering the robust financials and rising demand across sectors, we recommend it as a BUY.



BHAGIRADHA CHEMICALS & INDUSTRIES

Ticker: 531719 BUY: Rs.418.95
Target: Rs.455

The company is engaged in manufacturing of technical grade insecticides, herbicides and fungicides. Over the last six years, it has exported 70 per cent of its produce to countries like Australia, South Africa, China, Germany, Singapore, Malaysia, Taiwan, Indonesia, Peru, Brazil, etc. In FY18, its revenue declined as production Block-III was closed for ten months due to fire accident. However, it has commenced the production from March 2018. Azoxystrobin and chlorpyriphos are the key products which contribute 50 per cent towards total revenue. On account of good monsoons this year, the company is expected to perform well in FY19. Due to uncertainties prevailing in China related to environmental norms, Indian pesticides industry would benefit and grow in double digits. Considering all these factors, we recommend it as a BUY.