Seya Industries Ltd. :- Next Aarti in Making

Dear members

Glad to post new stock analysis from Industrial Goods and Specialty Chemical sector.

Fundamentals are awesome, should be in portfolio for long term, I will add slowly 40-50 stocks for 12 month in portfolio.

SEYA INDUSTRIES LTD.
Cmp :- 465

(SCRIPT CODE :- SEYAIND)

BSE CODE :- 524324

COMPANY PROFILE :- 

• Seya Industries Ltd, an emerging leader in Chemical Industry, is engaged in manufacturing and exporting of Pigment,Pharmaceuticals, Agrochemicals and Rubber chemicals intermediates. It is a front-runner among young, dynamic and growing companies in India. 

• SEYA INDUSTRIES LTD, a Company, promoted by Technocrats, is engaged in manufacturing of Specialty chemicals at its state of the art manufacturing facilities in MIDC Tarapur, Boisar a notified chemical manufacturing zone 90 kms from Mumbai which have wide spectrum of applications in the manufacture of Pharmaceuticals (like Paracetamol, floxacins, etc), Personal & Health Care Products (like Hair dyes), Printing Inks & Paints (used in Laser/Ink jet Printers, for Road markings, etc), Agrochemicals (like DDT, etc) Insecticides/Pesticides (like Quinalphos, Mortein, Baygon, etc), Rubber chemicals (for Leather protection), Textile dyes, Thermic fluids (used as heating medium), etc. The company’s strength lies in its wide product offerings, ability to adapt to new markets and being environmentally friendly

• Seya Industries Ltd (‘Seya’) specialists in manufacture of Chlorination and Nitration processed Benzene based Products and aims to become the largest producer of Benzene based Chemical Intermediates in the world.

• Seya Industries Ltd is a vertically integrated benzene based specialty chemicals company which is undergoing an expansion plan of global scale. Company’s earnings trajectory, range of products offered and the chemical reaction capabilities highlight the increasing non-commoditised nature of the business, ensuring higher margin profile. Further, it also positions the company as a key beneficiary of the global specialty chemical sector trend of sourcing chemical intermediates from the environmentally compliant hubs in Asia.
• Expertise in Nitro chloro benzene/Chloro benzene value chain

  Seya was incorporated in 1990 as Sriman Organic Chemical Industries Ltd (SOCIL) with the initial capacity of about 14,400 MT for benzene based chemical intermediates. Its Tarapur plant has the capacity to manufacture 68,600 MT of chemicals in the Nitro chloro benzene (NCB) and Chloro benzene value chain catering to end markets like pigments, pharma, agro-chemicals, rubber chemicals, textiles and personal care.

  It caters to marque clients like Bayer, BASF, Atul, Clariant, Sudarshan, Mitsubishi Chemcials, Cappelle, Hindustan Insecticides ltd, Huber group, Chemie and exports to 25 countries.
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• SOURCE :- https://www.moneycontrol.com/news/business/moneycontrol-research/seya-industries-specialty-chemical-major-in-making-2479881.html 
• Ambitious capex plans
  Seya Industries is undergoing capacity expansion of 443,950 MT (Rs 735 crore) and is expected to commission it in H2 2019. Massive capacity expansion in a similar scale has be done by Aarti Industries (Rs 900 crore in 2-3 years) speaks about the company’s objective to reach global scale.
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  Source :- Annual Report 2018
• Focus on R&D
  Seya, with an aim towards scaling the value chain, has maintained a higher run rate for R&D expense compared to the industry leader. Employee cost has surprisingly been kept in check contained. Here, however, there is a possibility for increased allocation as the company undergoes more complex chemistry processes and competes with the global leaders.
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• SOME MORE READING FROM MONEYCONTROL :- https://www.moneycontrol.com/news/business/earnings/q2-fy19-review-add-these-2-aromatic-chemical-companies-to-your-portfolio-3208091.html
• http://www.businessworld.in/article/Seya-Industries-Formula-For-Success/31-03-2017-115514/ 

KEY FUNDAMENTALS :- 

STOCK INFO
Market Cap	1379 Cr
P/E	18.55
52 W High/Low	826 / 378
Face Value	10
EPS	30.26
Book Value	300
Price/Book Industry PE	1.86 45.24

SHARE HOLDING PATTERN
Promotors	74.23 %
MF	8.12%
DII	--
Public/NII	17.29%
TOTAL	100%

ANNUAL RESULT :- 

• Company constantly generates revenue and slowly growing.
• Company constantly making higher profit. PAT increases YOY

• Company continue posting profit of PROFIT of 50 Lakh in 2011 to reach profit 52.40 CR. in FY 18.

• If same trend continue than FY19 PAT will be expected to 74 Cr. which is highest ever PAT since company's establishment.

• Company shown five fold jump in EPS in FY14 to FY18.

• Company expected to notch EPS of 30 in FY19.

• Company's Revenue  & Net profit continue increasing. Though ROE is decreasing from past 2 years.

• Company's Asset continue increasing. 
• Company has almost less debt. Debt/Equity is 0.61.

Why to invest in Company :- 

• Trading at PE 18.55 against industry average PE of 45.
• Consistent profit making company.
• More Specific focus on R & D carried out by the company. .
• Company is expanding its business and research.
• Large  undergoing capacity expansion of 443,950 MT (Rs 735 crore) and is expected to commission it in H2 2019.
• Expertise in Nitro chloro benzene/Chloro benzene value chain.
• Exports to over 25 countries.
• Company is planning diversification into sulphur trioxide based specialty chemicals.

Verdict :-

• Valuation of the stock is reasonable, by seeing the strong growth prospects of the company, I have invested few amount in the stock keeping 700 target till March 2020

• The stock can touch 1000 levels in 1-2 years.

Negative :- 

• Company have low ROE.
• Low volume stock.

P.S. :- Already holding stock from 535 levels, one can check fundamentals by own as my views may be biased due to self investment.

Happy Investing

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This is a personal blog and presents entirely personal views on stock market for only education purpose. Any statement made in this blog is merely an expression of my personal opinion. These informations are sourced from publicly available data. By using/reading this blog you agree to (i) not to take any investment decision or any other important decisions based on any information, opinion, suggestion, expressions or experience mentioned or presented in this blog (ii) Any investment decisions taken if any would be his/hers sole responsibility. (iii) the author of this blog is not responsible. 

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NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION  BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN. 

Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”