APCOTEX INDUSTRIES

Apcotex Industries(AI ) is a group company of  Asian Paint  headed by Mr.Atul Choksi ,the former MD of Asian Paints Ltd.It was started in 1980 as a unit of Asian Paints and later de-merged into a separate company in 1991.AI is one of the largest manufacturer of synthetic rubber and allied products in India .Its products list also  includes Vinyl Pyridine  Latex, SB latex, Nitrile latex..etc. Company’s plant is located at Taloja near Mumbai. Its products finding applications in industries like Paper and Paper board, Tyre Cord dipping, Paints ,Gasket, Construction, Footwear, Automotive Components…etc. Company’s main raw material is petrochemicals and prices of the same is related with crude prices. Since the industries consuming its products are booming ,company can easily pass on the price rise of its raw materials to its customers to a certain extend.On the other side Natural Rubber prices are ruling at higher levels and expected to rule firm in future. In this scenario ,to a certain extend consumers of natural rubber are  shifting to  synthetic rubber as an alternative. This situation is very helpful for a company like Apcotex.

                    For the nine months ended in December 2009 ,company posted an EPS of Rs.12/- as against last full year EPS of Rs.8/-.Company also declared a buy back of shares from open market. AI is very liberal in its dividend policy and giving dividend in every year, last year it paid 40% on Rs.10 FV shares..At CMP of Rs.112 ,not much risk left in this counter.