= Money Times ~ https://moneytimes.in « Premium: Dhunseri Ventures Ltd.: A venture of Profit: Posted By Money Times On April 3, 2021 @ 9:34 pm In Money Times | Comments Disabled (Code:523736) (FV:Rs.10) (Price: 85.98.55) Warren Buffett says “It's far better to buy a wonderful company at a f Buying such a company’s share certainly leads you to sure shot profits. price than a falr company at a wonderful price.” Dhunseri Ventures Ltd. (DVL) at present appears to be one such a fair company which stands unnoticed and under discounted at the market place. Let us look at It Industry focus~ Holding companies create immense wealth to the promoting graup as well as to their share holders. In addition to its role of being the groups: anchor holding company, this company has created Impressive capactties of PET resins manufacture, in association with the global leader-IV_ Group. Production of PET polymer is dominated by few companies. Indorama Ventures (IVL) was the largest producer of PET polymer globally with an installed production capacity of 4.2 millon tons in 2017. The other leacing companies are MG Chemical with an installed capacity of 2.7 millon tons, Zhejiang Yisheng Petrochemical Co. (2.5 millon tons), Sang Fang Xiang (2.1 millon tons) and DAK Ameria (1.8 milion tons).After these top 5 majors, DVL occupied its space as a global player with manufacturing Units in three countres-India, Egypt and Africa, ‘Total consumption of PET resins which was 23.5 million tons in 2016 is recording @ growth rate of 6 % CAGR. In value terms i is expected to reach §8 billion by 2027. Company focus ‘This company belongs to the well known OHUNSERI group of companies which is having 4 listed companies-Dhunseri Ventures Lt¢. (DVL), Dhunseri Tea & Industries Lt, (DTIL), Ohunseri Investments Ltd, (DIL) and Naga Dhunseri Group Lte.(NDGL). The group's fist company- Dhunseri Tea Company Ltd. (DTCL) was incorporated in 1916 for cultivation of Tea and manufacture of Pharmaceuticals. Through continuous acquisitions, amalgamations and business restructuring over the ast 105 years, DTCL has emerged as the above four listed companies. Overthese years, the group's focus shifted from pharmaceuticals t PET resin manufacturer In Indla and overseas as well PET resins. Now, the group has evolved as a major player of Tea as well as Coming to DVL, it has now three subsidiary companies and three associate companies. Subsidiary Companies Dhunseri Infrastructure Ltd, (DIL) was incorporated on 82.2013 as a wholly owned subsidiary of Dhunseri Ventures Ltd, It started Ceveloping an Information Technology Park at the Kolkata IT Park, SEZ, Bantale and invested Rs 48,49 crore on land and development with an equity of Rs 9.55 cr. Twelve Cupcakes Pte. Ltd,, was incorporated on 8,5.2011 having its registered office at 5 Burn Road #02-01 Tee YIH JIA Food Building, Singapore (368972) for manufacturing of Breads, Cakes and Confectionery items. Its equity stands at S$ 5,965,000. Dhunseri Poly Films Private Limited was incorporated on 28th November, 2020 with its registered office at Dhunseri House, 4A, Woodburn Park, Kolkata -700 020. for the implementation of the new project of manufacturing of Polyester Films i.e, BOPET which isin the first phase of expansion at an estimated capex of Rs 400-500 crore. Associate Companies IVL Dhunseri Petrochem Industries P Lee, (IDPIL) was originally promoted as South Asian Petrochem Lig. by the group for setting up @ plant to manufacture 4,80,000 TPA of bottle grade PET Resin at Hala in West Bengal on -6-86. Subsequently, it was made as subsidiary of DVL through a share swap ratio of 1:10. Later, to overcome its raw material constraints and to expand its manufacturing capactties, the Indorama Group of Indonesia was taken in as a 50:50 JV Partner, IDPIL is now the second (only to Reliance) largest PET resin manufacturer In India with ts plants at Haldia (WB) ane Panipat (Haryana) with a combined capactty of 6,96,000 TPA. IVL Dhunser Polyester Company S.A.E,-DVL had set up Egyptian Indian Polyester Company S.A.E (EIPC SAE) to manufacture PET resins of '540,000 TPA. However, due to unrest in Egypt coupled with raw materials supply problems, its operations were suspended for two years, [After a 50:50 Joint venture with the global leader Indorama Ventures to restart ts operations, this subsidiary (EIPC SAE), became an astaciate company insulating the parent compeny from the business risks, Subsequent to this development, the company could clear its entire debt of $ 197 millon, It also commissioned another plant in Afica for PET manufacture, ‘TASTETARIA FOODS Pvt Ltd. (TFPL)-Dhunseri Ventures Ltd. (DVL), formerly Ohunsen Petrochem Ltd. has entered into # Joint Venture ‘Agreement with Choicest Enterprises Ltd (CEL), @ company from the Ambuja Neotia Group and Tastetaria Foods Private Ltd, (TFPL) (Formerly‘Tastetara Private Limited) to carry on the business of setting up and operating restaurants for making and selling the well - known ‘UNO’ brand of Chicago deep ~ dish pizzas under the exclusive Master Franchisee Agreement with Pizzeria Uno Corporation, Pursuant to the said agreement, DVL is holding 25% equity stake in TFPL. Financial Performance-(Rs. in crore) Particulars Fy 2018 Fr2019 Fv2020 Income 961.12 797.67 62.30" PaIDT. 4551 104.20 23.59 Net Profit 36.61 50.86 17.93 Equity 35.03 35.03 35.03 “Due to the reorganisation ofits businesses w.e.f 1-4-2019, only royalties from the sale of PET resins sold by the associate companies along with dividends, other payments and its own profits from treasury operations are reflected forthe past year FY20. The PET resin business sales was reflected in the books of assaciate companies. Performance ofits overseas associate company IVL Dhunseri Polyester Company S.AE (Which partly negated domestic associate company IDPIL) Is expected to be Impressive from FY21 iset. 1 good performance of the Looking at its present performance, It recoréed an impressive performance in the recent three quarters as shown in the table even without {any contribution from its subsidiaries, Contributions from its subsidiaries can be meaningful ony after FY23. ara sMonths ‘9Months Fv20 Rs.in crore OT UNE 20 QPEC20 bec 2020 ec 2019 March 2020 Income 22.02 33.2 43.69 98,90 61.03 62,30 Net Profit 14,19 23.92 33.01 nas 40.03 17.83 Equity 35.03 35.03 35.03 35.03 35.03 35.03 EPS 4.05 6.83 9.42 20.3 11.42 5.09 FUTURE POTENTIAL:ear. On 83-23, it divested its entre 25% holding in assaciate company TFPL in favour of its JV partner Cholcest Enterprises Lte, which resulted ina loss of around Rs 6.52 crore in the current fiscal. However, this development augurs well forthe company as it does not have any loss making associates on its balance sheet from this fiscal onwards. Before looking atthe brighter picture, here comes the nagative news for the current Its future performance potential appears brian If we take a close look at its subsidiaries and associate companies, More than thet, look at the value of the company’s unquoted investments in the equity of its subsiciaries and associate companies that stood at Rs 309.30 crore as on 31-3-2020.t is certainly a golé mine for the company. Even kts unquoted investments stood at Rs 256.89 crore as on 31-3-2020 offer huge profit potential for the company. It stood at Re 133.12 crore as on 31-3-2020, In light of the current three quarters performance, the company Is Ikely to record an EPS of around Rs 30 in FY21. Have your own take on its ‘market price after the release of the resus ‘SHARE PRICE POTENTIAL “The promoters held 75%, insurance companies hold 3.63%, other DIls hold a dismal 0.02% leaving the balance of 21.35% only with the general public, Once the domestic funds netice the company’s massive Investments in manufacturing PET resin, they are bound to keep it on their recor, Just ook at its present market discounting in comparison with other polymer companies. In view of the large capactties of ts associate companies (with 50% haldings) in petro resins, Share face Equty EPS-Rs. Book value Share Price # company scr cme as as PERatio —— RB.Ratlo Rs. Dhunsen Vent 35.02 10 13.97 240.68 95.70 6s 039 Bhansali Engg Polymers 16.59 1 10.72 21.47 140.95 15 656Supreme industries 25.41 2 49.52 16788 201300 ana 11.99 Mayur Uniquoters 22.66 5 a7.as 129.54 406,00 23.67 33 Plastiblends. 12.98 5 11.62 108,08 232,00 1997 25 Responsive Industries 26,68 1 0.08 24.71 160.50 2008 6.49 Kama Holdings 6.45 10 50.12 902 5669.00 113.1 6.36 as on 26.3.21 -STIN-Traling twelve months.as per BSE Data. Apparent gross under-discounting of Dhunseri Ventures cannot prevail for long. Mare so looking at the promoters investor friencly payouts of attractive dividends as well as liberal bonus issues:1969-bonus of 2:5,1974-bonus of 1:2,1976-bonus of 1:3,1985-bonus of 1:2 and 1992- bonus of 1:1. Thus the prevailing gross under-clscounting of its share wil certainly be a thing ofthe past soon. In the event of the management decides to unlack its investments in its two petrachem associate companies, winall profs are there for sure for the investors. There Is no reason elther for the company or with its management why investors cannot look forward to its share price exceeding its book value of Rs 240.48 in an year. Hence investing in this company at this under-discounted level makes good investment sense at the beginning of the new fiscal 2022. [Article printed from Money Times: https://moneytimes.in venture-of-profits/ URL to article: https://moneytimes.in/moneytimes/dhunseri-ventures-Itd- Copyright © 2019 Money Times. All rights reserved,