Balaji Amines - Into Growth Trajectory - Sunidhi

BAL is India's largest manufacturer of methylamines and their derivatives, with a market share of over 60%. Through judicious and far-sighted backward/forward integration, BAL internally consume over 70% of its methylamines production. BAL is the world's largest producer of Di-Methyl Amine Hydrochloride (DMA-HCL) commanding nearly 90% of the global market share.

BAL is the only manufacturer in India of N-Methyl-2-Pyrrolidone (NMP). Morpholine, 2- Pyrrolidone (2-P) Gamma Butyrotactone (GBL), Poly Vinyl Pyrrolidone (PVP K30) and N-Ethyl-2-Pyrrolidone (NEP), which are widely accepted by customers across the world.

With efficient usage of plants, product mix, increase in value chain and increase in plant efficiencies which has optimised the consumption co-efficient of materials and stringent cost control measures implemented in almost all the areas BAL has been able to showcase its performance and has demonstrated resilience performance in these competitive market.

BAL's plants have been developed indigenously and continually revamped over the last two decades to maximize productivity levels with minimum capital outflow and optimal utilization of utilities and raw materials. With its unrelenting in-house R&D endeavor, the company has developed and launched several new products over the years on par with the world's best in quality and at comparable costs.

Over the last decade, India has emerged as one of the world leaders in the discovery, development and manufacture of pharmaceuticals, chemicals and specialty products. BAL is among the frontrunners in this impressive growth story, providing high-quality inputs to a host of well-known global brands.

Through a series of sustained and systematic process refinements in its indigenous facilities, BAL has been consistently adding capacities to meet the ever-growing demand for its world-class products, from both the domestic and overseas markets.

At the CMP of Rs. 46, the share is trading at a P/E of 3.8x on FY14E and 3.2x on FY15E. We recommend BUY with a target price of Rs. 60 in the medium term.

Source : Equity Bulls

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