PUNJAB CHEMICALS AND CROP PROTECTION-Patience will Pay Off

Punjab Chemicals and crop protection is a member
of Shroff group headed by Shalil S Shroff.
Company has operations through various divisions
like Agro Chemicals, Pharmaceuticals, Industrial
Chemicals ..etc .In agrochem sector, company making
various types of Herbicides, Pesticides and
Fungicides.PCPL’s 75% income coming from
agrochemicals 10% from Pharmaceuticals,10% from
industrial chemicals and rest from international
trading. Company has also presence in bio
pesticides and seed Inoculants.Company has four
international subsidiaries SD Agchem (Europe) NV,
AgriChem B.V Netherland,SINTESIS QUIMICA S.A.I.C
Argentina,and Source Dynamic LLC. All these acquired
companies are not very small ones .Company’s products
are also exported to 60 countries worldwide. PCPL is
the words largest producer of oxalic acid and
derivatives used in agrochemical industry and
exporting it to clients like Syngenta and Dow
Chemicals.Company’s last year was a disaster due
to various reasons like bad performance of
subsidiaries abroad due to recession, one of the
worst monsoon season in India and most importantly
a fire at its Herbicides unit in Mohali ,Punjab.
But now most of the problems are solved and company
is expected to post encouraging performance going
forward. As an indication of this ,promoters are in  a buying spree
from open market in recent times.
At CMP of Rs.135/- it is a good BUY for real investors.

BHARAT RASAYAN - BUY

Bharat Rasayan is a member of Bharat Group and one of the leading Manufacturer and Exporter of large range of Pesticides, Formulations and Intermediates for Crop Protection and Pharma Industry. Currently company exporting its products to more than 55 countries across the world.Bharat has a large domestic presence too with 18 branch offices, 18 depots and 1200 dealers.Company’s products includes Insecticides,Herbicides,Fungicides and Intermedites.It is one of the few companies manufacturing its own technical grade pesticides from basic raw materials with storng R &D.Due to governments thrust on agriculture sector company’s like Bharat Rasayan is expected to perform well in future.Last year company has posted a turnover of 106 crore and a net profit of 5 crore which translates into an EPS of Rs.11.5 .For the nine month ended Dec 2009 ,company already posted an EPS of Rs.11.5 and expected to post Rs.15/- for the full year. Company has an equity base of just 4.25 crore and out of this 75 % is held by the promoters itself. A decent BUY at CMP of Rs.80/- which is at a P/E multiple of 5 on expected full year EPS.

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.