Sudarshan Chemical Company analysis

Ticker – 506655/ SURDARSCHEM

ISIN – INE659A01023

Industry Overview : 

Speciality Chemicals are particular chemical products which provide wide variety of effects on which many other industries and sector depends. – Wikipedia

In simple words the product of Speciality Chemicals is Raw material for Other. Different from Commodities, the composition of speciality Chemicals make difference between the performance of the customer product which use speciality Chemicals as Raw material.

Speciality Chemicals industry is mature industry, for decades, many industries have utilise in manufacturing and finished goods. Some categories are adhesives, Agrochemicals, cleaning materials, cosmetics, construction chemicals, eatable flavor, food colouring, Fragrance, Industrial gasses, lubricant, polymers, Textile related chemical.

Growth in demand of Speciality Chemicals is depending upon industrial activities. Whenever the industrial activities increase, demand for speciality Chemicals also increase. Mainly the driving sectors are Automobile, Textile, Infrastructure and construction. Food industry is not so much sensitive as for food industry, cost of Speciality Chemicals is low as of Total cost.

During last 10 years speciality Chemicals saw Lower growth and Low profitability. Consumption also showing up’s and down. But in recent times trying to improve Margin and going through transition by increasing Price, specially taking place in adhesive, polymer, paper water treatment etc. During 2014-19; 4% growth is expected in the value of consumption of speciality Chemicals all over the world.

The market is also concentrate. Top 5 speciality Chemicals like polymer, construction chemicals, industrial cleaner,  electronics and electronic chemical segments account for 37%. Top 10 segments account for 61% of Annual sales. Also as the Industrialisation is taking place in Asia and Africa, the sector is developing in Asian economies. Dominant players in the Sector was North American, Western European companies. But in recent days it is changing. As the Global chemical industry is shifting towards the Middle East, Speciality Chemicals industry is also no exception for That.

Emrgence of India as manufacturer and supplier of Speciality Chemicals has had Major impact on the market. Some Large player are listed and Operating in India directly or indirectly. Some of them are BASF, Clariant Chemical, AkzoNobel etc. The Market in India is very big for Industry as well as agriculture. As Infrastructure and Textile also existing in India, India may play key role.

Company Overview : 

Sudarshan Chemical Industries company was incorporated on  February 19, 1951 at Pune as a private limited company and converted into a public limited company on December 31, 1974.

It is a holding company operating in variety of segment in business of Pigments through which it earn 90% revenue. As per the company website, it is operating is 85 Countries including USA, Netherlands. The company supplies Pigments to many industries Paints, plastic, ink. The company makes all its products in–house on its own production plants in Roha and Mahad, in the Maharastra state of India. Its extensive range of products includes organic and inorganic pigments, mica–based effect pigments, chemical intermediates and pesticides. The company also have a continuous R&D programme, with over 100 technologists working on new and customised solutions.

Products : Colour

  • Plastics
  • Industrial coatings
  • Decorative paints
  • Powder castings
  • Liquid inkss and Offset inks
  • Textile
  • Cosmetics

Effect Products

  • Industrial coatings
  • Powder castings
  • Offset inks
  • Textile
  • Cosmetics
  • Architectural coatings
  • Automotive coatings
  • Leather coatings
  • Seed coatings
  • Bead coatings

SAREHOLDING :

Financials and Ratios

 2010-112011-122012-132013-142014-152015-16
Revenue707.12744.23785.251026.251088.291207.26
Net Profit55.8136.1521.0634.4244.4171.63
Net Profit Margin7.894.852.683.353.895.93
ROE22.8713.387.4911.3415.1321.91
ROCE15.228.5446.578.8112.25
ROA9.775.022.413.804.707.47
Div per Share12.512.512.5151.753
Payout %15.5223.9341.0730.1628.5529
EPS80.6252.2230.4149.726.1310.35
Asset Turnover123.90103.4989.9113.54120.84125.95

Future Prospectus : 

The future of the sector is looking good. But the position of the Company is also important. Now doing well and Operating with its full operating efficiency.

When the sector is growing merely 2% the company is growing fast and showing good Profit Margin. Pigment, the sector in which the company is operating is important one and also having access all over the world. Important thing.

Check the valuation before the investing.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter