CAMPHOR & ALLIED PRODUCTS LTD - JOINING HANDS WITH A WORLD LEADER

 Camphor and Allied Product is a niche play in Indian Specialty Chemical Segment. It is  the largest exporter of specialty aroma chemicals from India . Its product range includes fragrance chemicals such as amberone, pharmaceutical products like  camphor and terpineols, aromatic chemicals like  citwanene, and  industrial chemicals such as alpha pinene.This company taken over by one of India’s largest fragrance manufacturer Oriental Aromatics Limited in 2008 at a price of Rs.167 per share.Using the modern technology of Dupont ,USA  CAPL is the largest manufacturer and pioneer in Turpine Chemistry in India. Company’s  products are mainly  exported to Europe, UK and US for use in flavours, fragrances, pharmaceuticals, soaps, cosmetics, tyres, paints , varnishes...etc.

                                                                                           Not only the status of India’s largest aroma chemicals manufacturer but its new relation with  AganAroma & Fine Chemicals    which is a subsidiary of Makhteshim Agan Group -an affiliate of ChemChina - ( Chem China is  the largest Chinese chemical company ) creating interest in CAPL . As per the agreement with Agan  ,high margin products produced at company’s new plant located at Vadodara will be marketed by Agan worldwide . Agan will also provide technology expertise to camphor. Company claiming this  is the world’s most advanced plant for manufacturing high margin Musk and related products.Last year company started commercial production from this facility and the recent results of the company speaking for itself.

Now company is planning to give priority to reduce its debt .Last year company sold a non core land asset to limit the dependency of debt for setting up the new plant.Last year company also skipped the dividend due to this reason .With robust performance in  ongoing financial year ,let us hope the company will back to dividend list in this year.In the latest  December quarter  CAPL reported a turnover of Rs.77 Cr ( last year same period Rs.54 Cr) and net profit of Rs.8.20 ( Rs.4.5 Cr) .For the nine months  of this FY ,CAPL reported a net profit  of Rs.14.53 Cr and an EPS of Rs.28.30 .Now company completed major capex and result of the same started to flow .

                                       Click on the figure for a better view

CAPL  is  in a  niche segment backed with strong support of a world leader but  a less researched company  by market participants  . With revival in western economies, scaling up the production capacity to full utilization level ( Currently around 75-80 % level) , reduction in debt using improving cash flow ,possibility for  further expansion in relationship with Agan  ..etc ,  company is expected to report even  better numbers going forward.

Recommending to invest with a long term view at CMP of Rs.182 .Stock listed only in BSE


Link to Company website HERE

Link to Agan Aroma HERE

Link to Makhteshim Agan Group Web site HERE

Disc : It is safe to assume that I have vested interest in CAPL