DEEPAK NITRITE - PRODUCT FOR THE FUTURE

 

Deepak Nitrite  is a Baroda Based company manufacturing Organic,Inorganic ,Fine and Speciality chemicals.Its product list covers Sodium Nitrite,Methoxamyne,Resorcinol,Xylidine, Acetoxime, Alkali Blue, Benzotriazole, N-O-Alkylated Hydroxylamines..etc.These products are mainly used in the manufacturing process of  Agrochemical Intermediaries,Bulk Drugs, Brightning Intermediaries and Rubber Chemicals.DNL is India’s largest manufacturer of  Diamino Stilbene Disulfonic Acid  which is using for manufacturing Optical Brightning Agents..Last year company started the work of a Greenfield Chemical project in Gujarat which will increase its capacity substantially going forward. What catching our attention in this company is its recent launch of Fuel Additive Products. These products are used for improving the quality and efficiency of fuels and make it latest  Euro compliant . Company’s products from this division is expected to play a crucial role in India’s transformation from Euro 1 to Euro II and Euro IV standards .Company already got orders from domestic refineries and expected a turnover of around Rs.75 Cr from this division by next financial year. It is sure ,Government  will eventually make Euro Compliance  to all cities in not so distant future. This will open  huge opportunity for the company going forward. In the financial front company has posted an EPS of Rs.22/- and declared a dividend of 50% in last FY.The first quarter of this FY was even better and it is expected to improve its performance going forward due to the overall improvement in the user industries of its products.Currently DNL is trading at Rs.191/- .Medium to long  term investors can BUY at current level.

TRANSPEK INDUSTRY LTD - BUY

Transpek Industry Ltd is a 45 year old company established
in Baroda by Shroff Group.It is one of the largest
producers and exporters of organic and inorganic chemicals
from India. Its products are used in industries like
Petrochemicals, Pharmaceuticals,Agrochemicals ,Dyes
and polymer.Company manufacturing more than 50
products used in these industries.Out of the total sales,
close to 60% income derived from exports and balance
from domestic sales. Transpek has a good research division
too for inventing new products.In last financial year
performance of the company was severely affected by
foreign exchange loss on derivative
contracts which the company entered to hedge the risk.
Now after the stabilizing of exchange rate and improvement
in demand of company’s various products ,it is expected to
perform better in this year. One can BUY for decent return
in medium term at CMP of Rs.100/-