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
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.