The financial performance of the Issuer is strong with robust profitability margins. Total revenue for FY21 increased 15.75% to Rs 306.29 crore as against Rs 264.62 crore in FY20. PAT increased by 38% to Rs 52.26 crore for FY21 when compared to FY20. The EBITDA and the net margins were 23% and 17% respectively for FY21.
Return on net worth was 31.49% for FY21. The debt to equity ratio is low, being 0.54 as of 31st March 2021. Return on capital employed is 27%, 33%, and 34% for FY19, FY20, and FY21 respectively.
|Cash generated from operations||24.32||25.31||7.36|
With an EPS of 26.02 as of 31st March 2021, the Issue is valued at 41.62 times its earnings at the higher price band of Rs 1083 per share. P/BV is 13.1times at a net asset value of Rs 82.62. The average P/E of the sector is 56.05 which indicates that the Issue is reasonably priced.
The peers of the Issuer are shown in the peer comparison details along with their key figures. However the peers are not closely comparable as all of them operate in their own niche segment. The product portfolio of the peers differs in the application as well as their formulation.
|Particulars||Tatva Pharma||Aarti Industries||Navin Flourine||Alkyles Amine||Vinati Organics||Fine Organics|
|Face Value per share||10||5||2||5||1||5|
|Total Income for FY21||306.3||4506.8||1258.4||1249.4||980.1||294.4|
|NAV per share||82.62||96.97||33.01||38.82||15.02||23.86|
|Return on net worth||31.49%||15.23%||15.76%||37.27%||17.45%||16.45%|
Specialty chemical companies have a distinguished and differentiated business model. Each player operates in a niche product segment and enjoys strong entry barriers and a higher level of product customization. This creates a business model with stable growth.
Tatva Chintan Pharma is the largest and only commercial manufacturer of SDAs for zeolites in India. It also enjoys the second-largest position globally as per RHP. The Company is one of the leading global producers of an entire range of PTCs in India and one of the key producers across the globe. SDA and PTC products have various applications in green chemistry, which is pertinent considering the growing focus on green and sustainable technologies. The Issuer has strong financial performance with an increasing trend in profitability margins. Hence, one might subscribe to the Issue.
Review By CA Priyanka Choudhary on 12th Jul 2021
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About CA Priyanka Choudhary
Priyanka Choudhary Jain is a Chartered Accountant and an experienced credit analyst. She has worked with CRISIL as Senior Credit Analyst on ratings assignments including business and financial analysis in Corporates as well as the Public Finance Sector.
Email: [email protected]
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Investors should bear in mind that any investment in stock markets are subject to unpredictable market related risks. Above information is based on RHP and other documents available as of date coupled with market perception. Author has no plans to invest in this offer.