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F

Camlin Fine Chemicals Ltd
C.M.P: Rs.125.00 Target Price: Rs.144.00

BUY
July 14, 2010

I R S T C A L L

1 Year Comparative Graph
• We

SYNOPSIS
initiated coverage of Camlin Fine Chemicals Ltd and set a target price of Rs.144.00 for medium term. Fine Chemicals is the world's second largest manufacturer and marketer of food grade antioxidants TBHQ and BHA. the quarter, the company has approved the increase of borrowing limit.

• Camlin
Camlin Fine Chemicals Ltd BSE SENSEX

Stock Data
Sector Face Value Rs. 52 wk. High/Low (Rs.) Volume (2 wk. Avg.) BSE Code Market Cap (Rs.In mn)
Specialty Chemicals

• During 10.00 137.00/42.00 7669 532834 726.8

• Camlin Fine chemicals are proposed a right

issue of equity shares to the existing shareholders of the company.
• During the year ended, the robust growth of

Share Holding Pattern

revenue is increased by 24% Rs.1252.20 million.
• The top line and bottom line of the company

R E S E A

are expected to grow at a CAGR of 18% and 20% over 2009 to 2012E respectively.

V.S.R. Sastry Equity Research Desk vsrsastry@firstcallindiaequity.com Dr. V.V.L.N. Sastry Ph.D. Chief Research Officer drsastry@firstcallindia.com

Financials (Rs.in.mn) Net Sales EBIDTA PAT EPS P/E

FY10 1252.2 147.5 42.8 7.37 16.96

FY11E 1477.6 186.4 49.5 8.52 14.68

FY12E 1654.9 204.4 57.8 9.94 12.57

R C H

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Peer Group Comparison Name of the company Camlin Fine Chemicals Chembond Chemicals DIC India Ltd Keltech Energies Ltd CMP(Rs.00 Market Cap.48 Dividend (%) 20.94 Mar-09 321.00 25.) 726.64 P/Bv(x) 2. During the quarter.37 8.78% to Rs.67 1.42 2 .00 274.00 P/E(x) 16.95 37.6 2845.00 182.8.95% to Rs.18 4.365.standalone (Rs in mn) As At Net sales PAT Basic EPS Mar-10 365. when compared with the prior year period.79 11. the profit of the company surged by 37.96 22.11.Mn. Quarterly Results .1. while total income for the quarter rose 14.00 Investment Highlights Q4 FY10 Results Update Camlin Fine Chemicals reported a steep zoom in standalone net profit for the quarter ended March 2010.02 59.5 274.68 4. Net sales for the quarter for the quarter rose 13.43 1.27 million from Rs.42% surged over previous year period.8 1157.78 37.00 310. It posted earnings of Rs.94 a share during the quarter. registering 37.00 35.94% to Rs.18 million in the same quarter previous year.18 1.79 million.10 32.370.(Rs.0 EPS(Rs.47 9.33 million.) 125.41 %change 13.00 8.27 1.) 7.00 35.

39 million. when compared with the prior year period. while total income for the quarter rose 25% to Rs.20 million. 2010 as compared to Rs. 2009. The ratio of the rights entitlement is 3:5 (i.85 million for the year ended March 31. Net sales for the year ended is rose 24% to Rs.86 million for the year ended March 31.33.e.Break up of Expenditure FY10 Performance The company has posted a net profit of Rs.75 3 .1263.1252. Right issue Camlin Fine chemicals are proposed a right issue of equity shares to the existing shareholders of the company. three equity shares for every five shares held).42. The issue price per equity share is Rs.15.

And also has approved the increase of borrowing limit.each for the year 2009-2010.per share under the 'Camlin Fine Chemicals Employees' Stock Option Scheme. 2.00 per Equity Share of Rs.Recommendation of dividend Camlin Fine Chemicals has recommended a dividend of Rs. 10/. Its mission is to be the largest food antioxidant and ingredient manufacturer worldwide. the corporate group. 10/. was established in 1931 and is a pioneer in art and stationery material in India. Camlin diversified into Pharmaceuticals and Fine Chemicals two decades ago. 4 . 50/. The entire management team and employees of Camlin Fine Chemicals Division are now a part of the independent legal entity formed under the Indian Companies Act 1956 Camlin Fine Chemicals is the world's second largest manufacturer and marketer of food grade antioxidants TBHQ and BHA. Company Profile Camlin. Allotment of shares Camlin Fine Chemicals Ltd has allotted 3190 Equity Shares of Rs. 2008' (ESOP 2008) of the Company. The Fine Chemical Division of Camlin got de-merged into a separate company named as Camlin Fine Chemicals on 22nd December 2006.each to employees who have exercised their options to apply for equity shares at an exercise price of Rs. Their facilities are HACCP and ISO 9001: 2000 certified.

Fine LifeStyle Brands: Luxury Fashion Brands 5 . / USP • Amlodipine Besilate E.P • Amlodipine Salts • Advance intermediate of Amlodipine • Intermediate of Miconazole Nitrate d) Super Absorbent Polymer Subsidiary Details: • • • • Chemolutions Chemicals: Specialty Chemical Intermediates Sangam Laboratories: Nutraceuticals Fine Renewable Energy.Product Range: a) Food Ingredients – Antox TBHQ (HACCP Certified) FCC V / FAO / WHO (Tertiary Butyl Hydroquinone) Antox BHA (HACCP Certified) FCC V / FAO / WHO / EEC ( Butyl Hydroxy Anisole) b) Sweetener Sucralose FCC V c) Active Pharmaceutical Ingredients • Miconazole Nitrate B. / USP • Clotrimazole B.P.P.

00 8.20 33.50 -60.12 -44.35 92.51 -55.57 137.mn) Description Net Sales Other Income Total Income Expenditure Operating Profit Interest Gross profit Deprecation Profit Before Tax Tax Profit After Tax Equity capital Reserves Face value EPS FY09 12m 1006.60 12.15 274.15 382.81 58.35 10.29 1668.00 9.11 52.59 86.00 7.87 -51.05 -18.16 -40.04 -49.20 11.00 42.in.45 10.26 42.85 58.91 13.68 -1303.19 1263.47 57.93 10.23 147.40 123.15 324.44 -66.84 FY10 12m 1252.Financials Results 12 Months Ended Profit & Loss Account (Standalone) Value(Rs.74 -863.91 -24.26 10.24 186.00 236.52 58.28 -28.39 49.37 FY11E 12m 1477.86 0.00 5.89 147.94 6 .86 58.13 73.29 1010.52 FY12E 12m 1654.45 4.20 -1463.09 1489.38 87.39 -1115.77 204.44 -63.

96 38.15 10.49 337.19 297.79 4.00 2.79 14.42 31-Dec-09 3m 333.91 -10.Quarterly Ended Profit & Loss Account (Standalone) Value(Rs.80 -16.50 4.16 0.54 370.in.11 -9.05 58.11 11.48 -250.55 -13.13 24.27 58.00 1.48 58.06 10.00 0.68 -13.64 -298.40 -298.60 39.80 14.33 -331.mn) Description Net sales Other income Total Income Expenditure Operating profit Interest Gross profit Deprecation Profit Before Tax Tax Profit After Tax Equity capital Face value EPS 30-Sep-09 3m 296.90 352.85 -6.94 30-Jun-10E 3m 347.68 46.00 10.74 25.26 20.85 53.15 10.69 30.82 17.94 -8.12 58.29 1.37 -14.12 -9.00 2.04 -14.94 7 .87 39.77 -12.77 31-Mar-10 3m 365.64 4.60 23.61 11.15 4.

11 3.17% 3.Key Ratios Particulars No.01 3.8 1. of Shares(In Million) EBITDA Margin (%) PBT Margin (%) PAT Margin (%) P/E Ratio (x) ROE (%) ROCE (%) Debt Equity Ratio EV/EBITDA (x) Book Value (Rs.35% 14.21 4.35% 5.82 11.36% 21.75 2.74 1.03% 1.90 65.56 75.93 57.65 8 .78% 3.72% 0.21% 3.00% 3.28 2.8 14.46 FY10 5.82 12.42% 16.91% 1.68 12.18 FY11E 5.62% 5.57 13.42 11.87% 26.82 12.13% 28.42% 3.94% 29.49% 12.66% 5.) P/BV FY09 5.50% 33.96 12.21% 1.90 FY12E 5.89 4.91 50.

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We recommend ‘BUY’ in this particular scrip with a target price of Rs.148.125. Price to Book Value of the stock is expected to be at 1. This industry requires the best technical know how.94 respectively.90 x and 1. Industry Overview The Specialty Chemicals segment in the Indian Chemical Industry is a new emerging sector which brings promises of huge growth.65 x respectively for FY11E and FY12E.52 and Rs. These chemicals are developed under the user's specifications which usually vary from one user to another.56 x for FY12E. the stock trades at 3.9.00 for Medium term investment. We expect that the company will keep its growth story in the coming quarters also. Earning per share (EPS) of the company for the earnings for FY11E and FY12E is seen at Rs. On the basis of EV/EBITDA. The methods of development depend on the application and the function of the chemicals.8.00. the stock is trading at 14.90 x for FY11E and 3.Outlook and Conclusion At the current market price of Rs.57 x FY12E respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 20% over 2009 to 2012E respectively. The different Specialty chemicals: • • • Diagnostic Aids Adhesives Paper Additives 11 . Specialty chemicals are those chemicals which are produced at a low volume.68 x FY11E and 12. they are high priced and usually targeted at a wide variety of markets.

• • • • • • • • • • • • • • • • • • • • • Flavors & Fragrances Elastomers Foundry Chemicals Industrial Enzymes Cosmetic Additives Dyes Food Additives Metal Plating & Finishing Chemicals Lube Additives Category Specialty Chemicals Industrial Cleaning Agents Fuel Additives Polymer Additives Oilfield chemical Mining Chemicals Photographic Chemicals Paint Additives Construction Chemicals Rubber Chemicals Water Management Chemicals Surfactants 12 .

Many of the present textile manufacturers are emerging as specialty chemical developers. Major companies in the Specialty chemicals segment: • • • • • • • ClariantIndia Ltd Ciba Specialty Chemicals Color Chem BASF Foseco Hindustan Organic Chemicals Balmer Lawrie Major consumers in the Specialty chemicals segment: • • • • • Textile industry Leather industry Paper industry Detergent industry Rubber industry 13 .• • Textile Auxiliaries Electronic Chemicals. The Specialty Chemicals segment is disunited with a huge number of companies. TNCs have a stellar inherence in this sector.

14 .• • • Paints industry Agro chemical industry Oil & gas industries. Market Characteristics • • The specialty chemicals segment is estimated around US $ 465 million The industry has emerged from textile auxiliary chemical industry. Future of the Specialty chemicals segment: • • • Focus on improvement in efficient processes for enhanced productivity India to be one of the main source of base materials The demand of the segment depends on the demand of the end users. Key Success Factors • • • • • Application of superb engineering skills for better chemical formulations Customization of the chemicals for specific end users requirements Technical knowhow to be imported for better production More export oriented productions Formulation of policies for the better functioning of the industry.

Ltd.________________ ____ _________________________ Disclaimer: This document prepared by our research analysts does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. This document is provide for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. 15 . Firstcall India Equity Advisors Pvt. The information contained herein is from publicly available data or other sources believed to be reliable but do not represent that it is accurate or complete and it should not be relied on as such. or any of it’s affiliates shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.

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