BALAJI AMINES

CMP- Rs.3,302
Tgt- Rs. 5,700
Potential upside= 63%
Sector= Special Chemicals

Company Overview
Balaji Amines Li is involved in the business activities of the Manufacture of
organic and inorganic chemical compounds. The company’s Total Operating
Revenue is Rs. 1227.78 Cr

● .Result Highlights of Q3FY22:

1. During the quarter, Balaji Amines

Ltd reported revenue of INR 5,649
Mn (+44.07% YoY / +7.46% QoQ).
Such robust performance was
mainly driven by higher realizations
from Amines & specialty chemical
segment (+42.39% YoY / +8.72% QoQ), followed by growth in the Hotel
division (+103.57% YoY / +54.05% QoQ).

1. On the operational front EBITDA in Q3FY22 stood at INR 1,587 Mn

(+35.33% YoY / +20.99% QoQ), and OPM got hit by 182bps YoY, but
improved 314 bps QoQ to 28.10% in Q3FY22. Margins fell on account of
rising input costs.
2. Net Profit in Q3FY22 stood at INR 1,016 Mn showing an improvement of
28.77% on a YoY basis and 15.32% on a QoQ basis.
3. EPS during the quarter came at 27.64 against 23.14 in the same quarter
last year.
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KEY FINANCIALS

INR Mn FY20 FY21 FY22 FY23E FY24E

Revenue 9,358 13,115 21,061 26,326 32,908

EBITDA 1,807 3,734 5,914 7,635 9,872

PAT 975 2,437 3,943 4,968 6,472

EBITDA Margin(%) 19.31% 28.47% 28.08% 29% 30%

NPM(%) 10.42% 18.58% 18.58% 18.87% 19.67%

SHAREHOLDING PATTERN

Particulars Dec-21 Sep-21 Jun-21

Promoters 53.70 53.70 53.68

FIIs 3.90 4.00 2.35

days 0.16 0.48 0.30

Others 42.24 41.82 43.67

Total 100 100 100

● Key Concall Highlights:

Capex plans:

1. Its Greenfield project at Unit IV is nearing completion and operations

are expected to commence during Q1FY23.
2. BAL is the sole manufacturer in India and the capacity of its DMC plant
would be about 10,000 to 12,000 tons per annum.
3. Intends to add up new Acetonitrile plant having 50tpd capacity.
4. The commercial production of the same is likely to commence in FY24.

Other highlights:
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1. BAL had carried down a plant shut down for 30-40days to
carry out debottlenecking of DMF and Acetonitrile.
2. The prices of DMF continue to remain healthy and its plant
capacity utilization is likely to increase from about 34% in 9MFY22
to 70-80% in coming quarters.
3. The company is confident about achieving capacity utilization of
60-70% at its DMC plant in its very first year.
4. It aims to increase the share of exports from the subsidiary plant
to about 25-30% going forward from about 18% in 9MFY22.
5. Agrochemical and Pharma space would be the major growth
driver for the rising demand for Methylamine.
6. DMC finds application in the production of Polycarbonate and
Lithium Batteries whose consumption in India will be driven by
various government incentives.
7. Management sees enormous scope for DMC exports as well.
● Increasing Revenue Contribution of Balaji Amines:

SWOT ANALYSIS OF BALAJI AMINES

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STRENGTHS
● Company has reduced its Debt.
● The company has delivered good
profit growth of 32.75% CAGR
over the last 5 years
● Company is expected to give a
good quarter
● First mover advantage
● Diverse Business Models
● Talent Management
● Higher profit margins
OPPORTUNITY
● Increase in Government
Regulations
● Lower Inflation rate
● More Technological Innovations
and Advances.
● Opportunities in the Online space
WEAKNESS
● Stock is trading at 10.17 times its
Book Value
● Extra Expense in building new
supply chain and logistics
networks
● Risk of Niche markets and local
monopolies
● Low loyalty within the Suppliers
● The Declining Market Share
THREATS
● Change in the Political
Environment
● Shortage of skilled human
resources
● Changing Demographics
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PORTER’S FIVE FORCES ANALYSIS

Bargaining power of Low ● Chemicals are the major

customers inputs in the company
● The chemical Industries
have more high-end users.
● The chemical Industries are
not highly differentiated

Bargaining power of Moderate ● They mostly depend on the

suppliers large suppliers of raw
material supply
● Substitutes are very limited
● Majority of suppliers are not
dependent ins the supply
chain

Threats of new Low ● High capital requirement to

entrants run the company
● Require maximum efficiency
and effectiveness
● Patent regulations
● Requirements of huge
human and research capital

Threats of close Low ● The buyers in this industry

substitutes need the same type of
chemicals for their usage
● Changing chemical
composition involves more
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R&D costs
● Substitutes for most of the
chemical products are rare

Rivalry among current High ● High competition in gaining

players market share
● MAjority of the players are
globally influenced
● Economics of scale is high,
and there is high
maintenance and existing
cost
● Fixed costs are high