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Those who invested in the stock at the lows of March 2020 have also made a quick buck amid the ongoing rally in the domestic equity market
It needs a lot of patience and luck to get a multibagger return from a stock that can change the fortune of investors on Dalal Street. Balaji Amines is one such stock, It has delivered 1,701 times returns in the past 20 years. The company’s scrip has surged to Rs 3,403.70 on August 4, 2021 from an adjusted price Rs 2 in 2001. This means, Rs 25,000 invested in this stock 20 years ago now stands at Rs 4.25 crore. Those who invested in the stock at the lows of March 2020 have also made a quick buck amid the ongoing rally in the domestic equity market. The Balaji Amines scrip has rallied over 1,400 in the past 17 months.
What has worked for the company?
Incorporated in 1988, Balaji Amines is engaged in the business of manufacturing methylamines, ethylamines, derivatives of specialty chemicals and pharma excipients. It is one of the leading manufacturers of aliphatic amines in India. Balaji Amines has been consistently adding capacities and fine-tuning processes to provide quality products at the lowest cost to the customers.
“The company kept on looking at products which did not have big competition. Focus on amines and anti-dumping duty on products further helped Balaji Amines in the long run,” Jiten Parmar, co-founder, Aurum Capital, told Money9.
Financials
The company has witnessed a consistent rise in topline and bottomline during the past 15 years. Gross sales of the company has increased around 16% annually to Rs 1,311 crore in FY21 from Rs 145.89 crore in FY06. Likewise, net profit has grown by nearly 25% annually to Rs 243.50 crore from Rs 9.07 crore during the same period.
Going ahead, HDFC Securities believes that Balaji Amines may post a net profit of Rs 293.20 crore in FY22, Rs 334.60 crore in FY23 and Rs 417.50 crore in FY24. On the other hand, it also believes that the company may report a net sales of Rs 1608.80 crore in FY22, Rs 1811.90 crore in FY23 and Rs 2113.90 crore in FY24.
Of late, the net profit of the company attributable to shareholders increased by 174% YoY to Rs 90.38 crore for the quarter ended June 30. It had reported a profit of Rs 32.96 crore in the same quarter last year.
Should you buy now?
Analysts still hold a ‘Buy’ rating on Bajali Amines. HDFC Securities gave a target price of Rs 3,805 post Q1 results. It believes that the robust demand from pharma and agrochemical industry that comprises 77% of its revenue mix, ramp-up in BSCL’s production, doubling of methylamines by FY24, capacity addition of acetonitrile and taking up the capacity to 25.5 ktpa by FY23 and production linked incentive scheme that provides the right tailwinds for long-term volume growth will support the stock price going ahead.
In a recent update, the company is aiming to set up a new plant to manufacture acetonitrile. The plant will cost company approximately Rs 80 crore and will be set up in 12 to 18 months. This will also increase the company’s capacity by 16,500 tonnes per annum (TPA) from 9,000 (TPA). Earlier, CD Equisearch gave a ‘Buy’ call on Balaji Amines with a target price of Rs 3,613.