ANUPAM RASAYAN INDIA

Smorgasbord of speciality chem: Banking on strong research

Surat (Gujarat)-headquartered Anupam Rasayan India is a leading chemical company engaged in the custom synthesis and manufacturing of speciality chemicals. The company has two major business verticals; viz.; (A) Life science-related speciality chemicals comprising products related to agrochemicals, personal care and pharmaceuticals, and (B) Other speciality chemicals comprising speciality pigments and dyes as well as polymer additives on an exclusive basis for its customers.

The company has six state-ofthe-art manufacturing facilities in Gujarat – four in GIDC Sachin in Surat district and two at Jhagadia in Bharuch district. Some of these facilities are ISO-9001:2015 and ISO 14001: 2015 certified. The company prides itself on sound technology, environmental consciousness, a history of innovation through research, and total commitment towards quality and customer satisfaction. R&D is a passion for the company, as a result of which it has introduced several products for the first time in India. The company has developed new eco-friendly routes for many products and most of them have been introduced on an exclusive basis for its customers.

Anupam Rasayan is doing extremely well in its financial performance. During the last three years, its sales have grown at a a CAGR of 45 per cent and its profit has grown at a CAGR of 51 per cent. Going ahead, its prospects are all the more encouraging. Consider:

• The company has gone from strength to strength on the financial front. During the last five years, its sales turnover has more than trebled from Rs 502 crore in fiscal 2019 to Rs 1,602 crore in fiscal 2023, with operating profit shooting up almost five times from Rs 93 crore to Rs 431 crore and net profit also surging around five times from Rs 49 crore to Rs 217 crore.

HUGE ORDER

• Going ahead, the company’s growth prospects are all the more promising. Recently, it signed a letter of intent worth $ 95 million (around Rs 700 crore) with a major multinational crop protection company to supply a new life science-related active ingredient. The company has entered into a long-term contract to supply this speciality chemical product for the next five years. According to Anand Desai, Managing Director of Anupam, the company has to date signed LoIs worth Rs 1,800 crore and contracts worth Rs 820 crore, taking the total contract LoIs signed in this fiscal year to Rs 2,620 crore. These trades demonstrate firm revenue visibility for growth in the coming years.
• With a view to expanding its fluorination chemistry business, Anupam has acquired a 24.96 per cent equity stake and joint control of Tanfac Industries Ltd (TIL) and has become a promoter jointly with the Tamil Nadu Industrial Development Corporation. TIL is a speciality fluorides chemical manufacturer while Anupam is a leading producer of hydrofluoric acid and is also engaged in the manufacture of other organic and inorganic fluorine-based products. This acquisition and joint management control will create significant value for Anupam through synergies and expand its fluorination chemistry business.

PASSION FOR R&D

A plus point for Anupam Rasayan is the importance it gives to research and development. The company has developed a strong R&D structure to drive its growth. Thanks to its fully equipped R&D team, the company has secured a strong market position at home as well as abroad. The management strongly believes that continued investment in R&D activities is imperative for continued success and growth.

Of late, due to high prices of raw materials and a slump in overseas demand in the wake of the RussiaUkraine war, prices of speciality chemicals had literally slumped. In this bearish environment, the stock price of Anumpam had also nosedived from the 52-week high of Rs 1,250 to Rs 570. But this bearish phase has been a temporary period. As a result, knowledgeable investors started accumulating these stocks at highly attractive low levels, pushing up the price to Rs 1,000 once again. Future prospects are highly promising and once the market situation gets normal, the Anupam stock price will start scaling new highs.

PERFORMANCE INDICATORS (Rs. in crore)

GOKULAGRO RESOURCES

Byword in edible, non-edible oils

Gandhidham (Kutch, Gujarat)-headquartered Gokul Agro Resources is one of the leading players in edible oils as well as non-edible oils and their related products. Demerged from Gokul Refoils and Solvents, the company has made rapid strides after its demerger and, with a view to bolstering its brand visibility, it has successfully established fully-owned subsidiaries in Singapore and Indonesia. This strategic move aims to augment the company’s proficiency in sourcing raw materials directly from their origins, besides helping in promoting its exports. The ISO-22000-2005-certified company has emerged as a leading exporter of these products – particularly in the US, the European Union, China, South Korea, Russia, Malaysia and Vietnam. Even at home, the company has an extensive marketing and distribution network which reaches consumers across over 20 states. The company manufactures and markets groundnut oil, soyabean oil and vanasapati, and exports castor oil.

Gokul Agro Resources is going from strength to strength on the financial front. During the last eight years, its sales turnover has expanded three times from Rs 3,631 crore in fiscal 2016 to Rs 10,740 crore in the year ended March 2023, with operating profit spurting more than five times from Rs 53 crore to Rs 282 crore and the profit at net level surging almost 15 times from Rs 9 crore to Rs 132 crore. What is more, prospects for the company going ahead are all the more promising. Consider:

• In edible oils, the company has emerged as one of the leading players in the country with a seed processing capacity of 32,000 tonnes per day, a DOC capacity of 1,000 tonnes per day and an oil refining capacity of 3,400 tpd, besides a vanaspati manufacturing capacity of 200 tpd. The company is also a prominent player in imported oils and is, in fact, the top player in palm oil. Crisil Ratings stresses that Gokul Agro will continue to benefit from its established position and the promoters’ rich experience in the business of edible and non-edible oils over the last three decades.

GROWTH BOOM

• Demand prospects for the company’s products are highly encouraging. To begin with, Gokul Agro Resources seems to have a respectable ROE. Further, the company’s ROE compares quite favourably to the industry average of 9.8%. This certainly adds some context to Gokul Agro Resources’ exceptional 53% net income growth seen over the past five years. However, there could also be other causes behind this growth, such as high earnings retention or an efficient management. Gokul Agro Resources’ growth is quite high when compared to the industry average growth of 18% in the same period.
• As far as non-edible oils are concerned, India has emerged as the largest producer of castor oil in the world and is the leading exporter along with China, The Netherlands, Japan and France. In India, the Gokul Agro group is the largest exporter of castor oil.

Prospects for castor oil exports are expected to be buoyant going ahead. According to a research study by Dublinbased Research and Markets.com, the global castor oil market is forecast to reach $ 1.61 billion by 2027, experiencing growth at a CAGR of 4.31 per cent during the period from 2023 to 2027. Gokul Agro is bound to benefit a lot on account of these prospects as the company has one of the largest manufacturing facilities to produce various grades of castor oil as well as castor de-oiled cakes. These facilities have been approved by many international importers/users, which is why the company has a huge and loyal customer base in the US, the European Union, South Korea, China, Singapore, Indonesia, Malaysia, Russia and Vietnam. The company operates across the world and also has fully-owned and subsidiaries in Singapore and Indonesia to cater to its international trading operations.

PINK FINANCES

• Gokul Agro’s financial condition is steadily improving with sustained growth in sales and ernings. At the end of March 31, 2023, its reserves stood at Rs 621 crore – more than 20 times its equity capital of Rs 30 crore. The company’s return on equity (ROE) for the last five year period is 18 per cent and last year’s ROE is at a praiseworthy level of 24 per cent. The company has not paid any dividend to its shareholders as yet, instead conserving its financial resources for growth and development. As the company’s annual net profit has crossed the Rs 100-crore mark recently, the time is not far when the company enters the dividend list.

The company’s shares with a face value of 2 are quoted around Rs 110. Discerning investors can accumulate these stocks to reap a rich harvest with a long-term perspective.

PERFORMANCE INDICATORS (Rs. in crore)