Friday, March 26, 2010


Companies making products through recycled method catching
attention every time when the price of such products making
new highs. Natural rubber prices are inching ahead and chances
of its prices coming down is very little mainly because of various
reasons like labour shortage,climatic change..etc in Kerala from
where more than 90% of NR is sourced. Latest reports showing
that production is also shrinking in global level too .On the other
hand synthetic rubber prices are also moving up in tandem with
crude prices ,since its raw material is crude derivative.In this
background let us keep an eye on GUJARAT RECLAIM 
largest producer of Reclaimed Rubber in Asia and one of
the top five producer in the world.This company was started
in 1974, making Reclaimed rubber from scraps of tyres,
tread peelings, natural rubber tubes, butyl tubes and
moulded rubber products.This is the first company introduced
surface treated crumb rubber manufacturing facility in India.
It also producing synthetic rubber reclaims such as
Butyl reclaim, Nitrile reclaim, EPDM reclaim, Latex reclaim,
Fluro-elastomer reclaim, etc. Company has captive power
plants which reduces its cost for energy.For the FY 2009
company posted a turnover of Rs.130 crore and NP of Rs 13.5 cr
.On a tiny equity base of Just 1.3 crore EPS was Rs.101/-.
For the nine month ended in FY 2010 company posted
an EPS of Rs.81/-.GRRP already paid a dividend of Rs.17/- in
this financial year and expected to pay even more. Along with
promoter stake of 47 %, persons related with MRF group is
holding substantial stake in this company. Over all, current
situation is very favorable for a company like this and
competition is expected to minimum from new plants going
forward mainly because of enviournmental problems associated
with this industry. Since this counter is illiquid, it is not advisable
for frequent traders. Investors having pure long term mentality
can take minimum exposure at CMP of Rs.730/- which is
trading at a P/E multiple of around 7 for last year EPS.


  1. Sales have remained constant, whereas other cos. in the same busniess have recorded manifold increase in sales and EPS.
    A waste of a co.
    Buy Apollo Tyres instead for a target of Rs. 250/-

  2. which are the other cos in the same sector ?

  3. MRF, Apollo Tyres, Falcon Tyres 2 name a few

  4. You are not correct, all these cos are using the product produced by this company.

  5. Just for a clarification
    As far as my understanding,there is only one company other than this one (Kerala Rubber and Reclaim) producing rubber through recycling method .But that company is a suspended one.

  6. Hi Value Pick,
    I think there is also one more company Indag Rubber in this space. But I like management of Gujarat Reclaim more than Indag and so I have invested in this company. I have bought it at around 750.

    Sir, what is ur call now. It is trading at 850+ now?

  7. in April when it reached 930 you recommended this stock to sell.. after which it came down to 750 level... Now in July it again reached 900+ level... what is your call now.. at 900+ still you would prefer to sell?

  8. vamsi rubber is also from same sector



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