BHAGIRADHA CHEMICALS AND INDUSTRIES - Cheaply Valued

Bhagiradha Chemicals & Industries was incorporated

in 1994 by Mr Koteswara Rao and D Sadasividu ,both

were previously working at Indian Institute of 

Chemical Technology.Company produces high quality

basic pesticides includes Chlorpyrifos Ethyl, 

Chlorpyrifos Methyl,Clodinafop-Propargyl and 

Triclopyr Butoxy Ethyl Ester ..etc. Such pesticides

are used on a wide variety of crops such as cotton,

chilly, rice, sorghun, soyabean, sugarcane, groundnut,

vegetables, and flowers. The company has a 

state-of-the-art R&D center at Hyderabad, 

which employs 30 scientists.It has a contract 

manufacturing agreement with Dow AgroSciences 

for the herbicide Fluroxypyr. Dow AgroSciences  

is the original inventor of Fluroxypyr.

With an increasing trend of MNCs to outsource

molecules that have gone off patent, opportunity 

of Bhagiradha is very large.At the end of last

financial year company started the production

of a new product ‘clodinafop’.Company’s financials

are also improving every year.Last year company

posted a turnover of 104 crore and a net profit

of 9.5 crore which translates into an   EPS 

of Rs.19/- .It also declared a dividend of 30%. 

Bhagiradha is now trading at a price of Rs 70/- 

which is at a P/E multiple of  just 3.5.

Sales growth in recent qtrs are subdued but 

company sources claims that the same will pick up

in near future. Agrochemical companies are started

to re-rated in stock market.So keep an eye on this.