The Company was once known as Chemicals and Plastics India ( CPIL ) ) , incorporated in 1962 was promoted as Urethanes India by Chemplast, the flagship of the Sanmar group, Tamil Nadu. It became a fully-owned subordinate of Chemplast in 1991 when the name was changed to the present 1. The company ‘s chief concerns are – PVC, Chlorochemicals and Piping Systems. It is one of the oldest administrations that is to the full integrated and has confined power works.
The company ab initio set up a 2500 TPA thermoplastic polyurethane works in Tamil Nadu in proficient coaction with BF Goodrich Company, US. In 1991-92, the capacity of PVC was enhanced to 48,000 TPA, doing it the 3rd largest maker of PVC rosin in the state. The company formed Peroxides India in coaction with Atochem, US, for a broad assortment of polymerization instigators ; and Drechem Speciality Chemicals, in proficient coaction with Dragoco, Germany, to fabricate aromatic chemicals.
Scheme and Operationss
For Chemplast, integrating – forward and backward integrating is the key. . The synthesis that underlies the polymer chemical science of PVC industry is besides brooding of the company ‘s attack to concern. The basic feedstock for its PVC works, ethene and Cl, come from its industrial intoxicant works at Panruti and its ain Chloralkali installations at Mettur and Karaikal. In chase of its forward integrating scheme, the company has re-entered the PVC pipes concern. The fabrication installations located at Ponneri near Chennai and Shinoli in Maharashtra. Entire PVC Pipes capacity is 56,000 metric tons p.a. including a broad scope of pipes such as force per unit area pipes, casing and screen pipes, SWR pipes, plumbing pipes and conduits. The shrieking systems are good known in the market for high quality under the trade name name “ Trubore ” .
The Chlorochemicals Division of Chemplast, itself the consequence of backward integrating by the group, manufactures a broad scope of merchandises utilizing a extremely incorporate fabrication procedure. These downstream merchandises are either chlorine derived functions or Cl users in the production procedure. The salt needed for chlorine industry is supplied by Chemplast ‘s ain salt Fieldss at Vedaranyam. The electrolysis procedure of fabricating Cl is power-intensive, but Chemplast is to the full equipped to bring forth sufficient confined power to run into its full demands. All this makes Chemplast one of the most incorporate chemical workss in the state with a closed fabrication cringle.
Chemplast ‘s merchandise scope falls into six distinguishable groups – PVC Resins, Caustic Soda/ Chlorine, Chlorinated Solvents, Refrigerant Gases, Silicon Wafers and Trubore Piping Systems. The fabrication installations are located at Mettur, Panruti and Ponneri in Tamil Nadu, Shinoli in Maharashtra, and Karaikal in the Union Territory of Pondicherry.
Bovine spongiform encephalitiss: 506355 | NSE: CHEMPLAST | ISIN: INE488A01027
Data as on 29 Jul, , 2010
NSEA A hypertext transfer protocol: //beta.sharekhan.com/Images/arrow_green_big.gifA A 8.90A 0.00A ( 0.00 % )
Day ‘s Scope
Net incomes Per Share
Avg Volume ( 10 yearss )
Price / Net incomes
52 Week Range 31/07/2009 – 01/10/2009
BSEA A A hypertext transfer protocol: //beta.sharekhan.com/Images/arrow_green_big.gifA 8.91A +0.011A ( + 0.11 % )
Ex – Dividend Date
Beta ( 3M/6M/12M/36M )
BSE Market Data ( Source Yahoo Finance )
NSE Market Data ( Source Share Khan )
’06 Mar ’08
Gross saless Employee turnover
Operating Net income
Net Net income
Beginning: Money Control
Indian Economic Environment
Indian economic system has been witnessing a phenomenal growing since the last decennary
Harmonizing to the estimations by the Ministry of Statistics and Programme Implementation, the Indian economic system has registered a growing of 7.4 per cent in 2009-10, with 8.6 per cent year-on-year ( y-o-y ) growing in its 4th one-fourth
The growing is driven by robust public presentation of the fabrication sector on the dorsum of authorities and consumer disbursement
GDP growing rate of 7.4 per cent in 2009-10 has exceeded the authorities prognosis of 7.2 per cent for the full twelvemonth.
Harmonizing to authorities informations, the fabrication sector witnessed a growing of 16.3 per cent in January-March 2010, from a twelvemonth earlier.
India ‘s industrial end product grew by 17.6 per cent in April 2010. As on June 4, 2010, India ‘s foreign exchange militias totalled US $ 271.09 billion, an addition of US $ 9.88 billion over the same period last twelvemonth.
Indian Petrochemical Industry
The Indian petrochemical industry has been one of India ‘s fastest turning domestic industries. This industry provides the foundation for fabricating industries such as pharmaceuticals, building, agribusiness, packaging industry, fabrics etc. Consequently, this industry becomes an built-in portion of the energy value concatenation thereby going one of the major sectors of the economic system. India in recent old ages has become a net exporter of chemicals on the dorsum of a enormous growing in abroad gross revenues of dyes, intermediates and forte chemicals.
The wide merchandise sections of the industry include:
1. Basic petrochemicals: These are the basic edifice blocks, which are divided into alkenes and aromatics. These are used chiefly for polymerisation. These are chiefly used to denominate the capacity of industry.
2. Polymers: These are made from basic petrochemicals by polymerisation. Major merchandises include PVC, HDPE, LDPE and PP. These find usage chiefly in the packaging industry and plastic industry.
3. Polyesters: These are man-made fibre used in fabrics industry. These include polyester fibril narration ( PFY ) and polyester basic fibre ( PSF ) .
4. Fiber Intermediates: These consist of PTA, DMT, MEG, paraxylene, caprolactum, and acronitrile and are chiefly used for fabricating man-made fibers like PFY and PSF.
5. Chemicals: These include Linear Alkyl Benzene ( LAB ) , methanol, maleic anhydride, phenols, ethylene oxide, orthoxylene and vinyl ethanoate monomer. They find usage in chemical industry.
A few arrows about the industry
The industry is oligopolistic in nature with four chief participants ruling the sector
Petrochemical industry is a cyclical industry
Demand of the petrochemicals generate from the downstream industries, which in bend are dependent on the province and growing of the economic system
The PVC industry
Polymers constitute over 70 % of petrochemical produced
The polymer sector has recorded an overall growing of 18 % while capacities have recorded a 26 % CAGR in the last 3 old ages
Polymer industry is characterized by high grade of concentration- few participants runing
It is a Rs. 3400 Cr. ( US $ 790 Million ) market, PVC exports histories for largest ball of the polymers being exported
PVC is basically used with additives, Pipes histories for over 50 % of PVC ingestion followed by overseas telegram overlay ( 14 % ) .
PVC, a polymers byproduct, is in demand in the Indian market at 554,000 dozenss per annum.
Peer Group Analysis
Chemplast Sanmar Limited is chiefly into PVC, Chlorochemicals and Piping Systems. Other major participants in this class are Finolex Ind, DCW, NOCIL, and Supreme Petro.
The Finolex Group is one of India ‘s prima industrial groups and has involvements crossing over several countries such as power, communications, petrochemicals and agribusiness. Finolex Industries Limited ( FIL ) , once Finolex Pipes Ltd. , was incorporated in 1981 and has been in the “ Plastics ” concern since so. Get downing as a modest stiff PVC ( Poly Vinyl Chloride ) pipe maker, FIL went on for backward integrating and now manufactures PVC rosin excessively.
DCW is a Gujarat base Company with production operations in Tamil Nadu & A ; Gujarat. It is a diversified maker of basic chemicals, such as: Acerb Soda, Liquid Chlorine and Chlorine based merchandises, Upgraded Limonite or Synthetic Rutile, Yellow Iron Oxide, PVC Resin, Soda Ash, Ammonium bi-carbonate, Liquid Bromine and Bromide. DCW has focused on development of value-added and export-oriented merchandises like Upgraded Limonite and Pigment grade Yellow Iron Oxide. DCW has embarked on an ambitious undertaking for the industry of Ferrite Grade Iron Oxide with a capital outgo of around Rs. 1 billion.DCW pioneered the industry of Soda Ash in India
NOCIL Limited is a portion of AMG ( Arvind Mafatlal Group of Industries ) , a well-known Business House of India holding diversified concern involvements. NOCIL commenced Rubber Chemicals fabrication in the twelvemonth 1975 in a designated Chemicals Zone about 40 kilometers off from Mumbai City. NOCIL today is the largest Rubber Chemicals Manufacturer in India.
Founded in 1942, Supreme is an acknowledged leader of India ‘s plastics industry. Managing volumes of over 100,000 metric tons of polymers yearly efficaciously makes Supreme the state ‘s largest plastics processors. Supreme Petrochem Ltd. is at the head of styrenics in India. And has a strong international presence every bit good. With a market portion transcending 50 % , the company remains the unchallenged leader in India.
Historically, Chemplast Sanmar ‘s top line has grown at a CAGR of 4.61 % from Rs 603.71 Cr in FY05 to Rs 756.31 Cr in FY09 and the tendency is expected to go on.
The strong gross growing is backed by the lifting demand for PVC, Company ‘s new enlargement programs that have already been put into consequence.
Chemplast Sanmar ‘s EBITDA Margin decreased on a amalgamate footing from 14.32 % in FY08 to 3.11 % in FY09. However it improved in FY10 and is expected to stay in this scope for the close hereafter due to increased capacity and betterments in operation.
The net net income declined in FY10 due to the immense capex that the company has undertaken and the involvement load. This will harvest benefits as the economic system picks up and therefore will better the rating of the company.
The diminution in portion monetary values has been chiefly due to the economic downswing and the inauspicious effects of petroleum monetary values. However it is expected to stabilise in the close hereafter and coupled with the increased capacity and world-wide demand, it is expected to increase.
The company has established a good path record with the bankers and fiscal establishments, thereby basking their assurance to the full.
The Sanmar group has successfully separated ownership and direction by set uping broad-based, sceptered Group Corporate Board consisting high individuals from varied background.
For long term the stock is expected to make high degrees of about 19-20 in a twelvemonth, so it can be a good investing chance.
For the short term, since the company has reported a net loss late, it is advisable to strong sell for a period of 3 hebdomads.