Target Achieved (121% Return) - AMINES & PLASTICIZERS LIMITED (APL)

Dear Readers,

Amine &  Plasticisers was recommended @ 49 Rs on 30/07/2017 and today 09/01/2018 touched 109 Rs.......Giving 121% return within 5 months........

Book the profit as my given target achieved today.

Happy Investing!!

Regards,

Kamlesh

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Dear Readers,

Amine &  Plasticisers was recommended @ 49 Rs on 30/07/2017 and today 05/01/2018 touched 88 Rs.......Giving 79% return within 5 months........

Regards,

Kamlesh
==========================================

Recommendation: Buy

Hold for 3 years

Target: 100 Rs.

Date: 30/07/2017

Amines & plasticisers ltd (APL)

                                            By Kamlesh Bavrva

Company Name: Amines and Plasticizers Limited

CMP: 49 Rs.

BSE Code: 506248

Market Capital: 271 Cr.

Face Value: 2

52 Week Low / High: 20.8/52.8

Book Value: 9.8

Dividend (%): 10%

Share Pledge: Nil.

Part – 1 Company Overview:

v Amines and Plasticizers (APL) was incorporated in 1973.

v It is a small cap company operating in chemical sector and having two manufacturing plants at Navi Mumbai & Khopoli in India.

v APL is the pioneer and largest producer of Ethanolamines, Alkyl Alkanolamines, Plasticizers, Morpholine, Alkyl Morpholines and Gas Treating Solvents in India.

v The Ethanolamines Plant was set up in the year 1973 under Technical Collaboration with the erstwhile Napthachemie, France (now a part of British Petroleum) and Plant Engineering was done by Ralph M. Parsons, USA. For all other products, the Company has developed the technologies based on its own in house R & D.

v APL is an ISO-9001:2008, ISO-14001-2004 & OHSAS-18001-2007 Certified Company.

v  APL is a global supplier of organic chemicals used in Oil Refineries, Natural Gas Plants, Ammonia Plants, Petrochemical Plants, Pharmaceuticals, Agrochemicals, Textiles, Oil Field Chemicals & Cosmetics etc.

v In the field of Ethanolamines and Alkyl Alkanolamines, APL is serving approximately 75-80% of the total demand of the Indian Market and is regularly exporting its products to over 50 countries globally including USA, Canada, Germany, New Zealand, South Korea, South East Asia, Japan, Australia and the Middle East countries etc.

v In the field of Plasticizers, APL manufactures a wide range of products which include Phthalates, Sebacates, Trimellitates, Acetates, Maleates, etc.

v It is the world third largest producer of N–Methyl Morpholine Oxide, which is the preferred solvent used for the manufacture of Viscose Staple Fibre by the Solvent Spun Process. APL's range of Alkyl Morpholines includes Lauryl, Methyl, Ethyl, Hydroxy Ethyl Morpholines etc.

v APL has also set–up Plasticizer plants in India and in Pakistan and is currently executing a turnkey project for a Viscose Rayon manufacturer for the recovery, regeneration and purification of solvent in the new 'Solvent Spun Process'.

v APL pioneered the manufacturing of Methyl Diethanolamine (MDEA) in India, an Ethylene Oxide derivative for which APL was rewarded the highest Award by the Government of India.

APL subsidiaries:

APL Engineering Services Pvt Ltd

v The amalgamation of APL Engineering Services Private Limited, wholly owned subsidiary of APL is in its final stages.

v The fabrication unit of APL Engineering Services Private Ltd. is fully operational and has been executing various orders for its clients. Also, the Order Book position of the Company is comfortable for the year.

 APL InfoTech Ltd.

v APL Infotech Ltd’s Pipe leak detection software has been customized and is in the process of being made operational.

v The Company is in talks with Gas Transportation Companies in India for installation of its software on their cross country gas transportation.

Amines and  Plasticizers  FZE, UAE:

v APL Wholly owned Subsidiary:

v The Company is contemplating expansion of its business operations in the Middle East and Europe.

v Keeping in view the said expansion, Amines and Plasticizers FZE in Ras Al Khamaih, United Arab Emirates for dealing in Specialty Chemicals and other Alkanolamines products and may opt for manufacturing at an appropriate time.

Export:

v During the year ended 31st March, 2016, Company’s export earning was ` 9313.40 Lakhs as compared to `12798.03 Lakhs.

v Exporting products in near 30 country.

APL Products by Type:

1.Alkyl Alkanol Amines

v Methyl Monoethanolamine (MMEA)

v Methyl Diethanolamine (MDEA)

v Di - Methyl Ethanolamine* (DMEA)

v Di- Ethyl Ethanolamine* (DEEA)

v Ethyl Monoethanolamine* (EMEA)

v Ethyl Diethanolamine (EDEA)

v Mono-n-propyl Monoethanolamine (PMEA)

v Mono-n-propyl Diethanolamine (PDEA)

v Mono-n-Butyl Ethanolamine (BMEA)

v Mono-n-Butyl Diethanolamine* (BDEA)

v Di-Butyl Ethanolamine (DBEA)

v Poly Ethanolamine (PEA)

v Tertiary Butyl Monoethanolamine (TBMEA)

v   

•           2. Alkanolamines

v Triisopropanolamine-85% (TIPA 85%)

v Monoethanolamine* (MEA)

v Diethanolamine (DEA)

v Triethanolamine-Tech (TEA-85% min)

v Triethanolamine-pure* (TEA-99%)

•          3. Morpholine & Substituted Morpholines

v Morpholine*

v N-Methyl Morpholine* (NMM)

v N-Methyl Morpholine Oxide 50% (NMMO)

v N-Ethyl Morpholine* (NEM)

v N-Formyl Morpholine (NFM)

v Hydroxy Ethyl Morpholine* (HEM)

v N-Acetyl Morpholine (NAM)

•          4. Specialty E.O./P.O. Products

v 2-Phenoxy Ethanol*

v 1-Piperidine Ethanol (2-Piperidino Ethanol)*

v Diethanol Isopropanolamine 85% DEIPA 85%)

v N-2 Hydroxy Ethyl Pyrrolidine*

•          5.E.O./P.O. Derivatives

v Polypropylene glycol 200/400/600/800

v Polyethylene glycol 425/900/2020/4000

v APOL-61/62/64/68

v Amine Poluols

v Glycerol Polyol

v Polyethylene glycol Adipates

v Sorbitol mixture Ethoxylates

APL Products by Industry:

•         1. Pharmaceutical Industry

v N-(2-Hydroxyethyl) Morpholine (HEM)

v 2-Piperidinoethanol

v 2-Pyrrolidinoethanol

v N-Methyl Morpholine (NMM)

v N-Benzylethanolamine (N-BzEA)

v Ethylmonoethanolamine (EMEA)

v Monoethanolamine (MEA)

v N-Ethyl Morpholine (NEM)

v Dimethyl Ethanolamine

v 2-Phenoxyethanol

•         2. Textile Industry

v Monoethanolamine

v Diethanolamine

v Triethanolamine

v N-Methyl Morpholine Oxide (50%)

v Methylmonoethanolamine

v Morpholine

v Methyldiethanolamine (for fabric softener)

v Diethylethanolamine

v PEG Series

v PPG Series

v APOL 61/62/64/68

v LAPE 45

3. Paints, Coatings, Printing Inks, Polyurethanes, Metal Working Fluids, Corrosion Inhibitors

v Dibutyl Ethanolamine

v Dimethylethanolamine

v Triethanolamine

v Diethanolamine

v Phenoxyethanol

v Butyl Monoethanolamine

v Methyl diethanolamine

v Diethylethanolamine

v N-Methyl Morpholine

v N-Ethylmorpholine

v Ethyldiethanolamine

v Butyl diethanolamine

v Morpholine

•         4. Agro Chemicals

v Triethanolamine

v Mono-n-Propylmonoethanolamine

v N-Propylethanolamine (PMEA)

v N-Acetylmorpholine

v Diethanolamine

v Methylmonoethanolamine

•         5. Rubber Industries, Mold Releasing Agents

v Morpholine

v Amine Polyols

v Glycerol Polyols

v Polyethylene glycol Adipates

v Glycerol Adipates

v Sorbitol mixture Ethoxylates

v Rheolease

•         6. Photographic Chemicals

v Triethanolamine

7. Cement Industries

v Polyethanolamine

v Diethanol Isopropanolamine (85%)

8. Cosmetic Industries

v Triethanolamine Pure

v Triethanolamine 99%

v  Phenoxyethanol

9. Oil Field Chemicals

v H2S Scavenger

v Demulsifier

v Acid Corrosion Inhibitor

•         10.Acid Gas Treating Solvents

v AMINOSOL - CST ® SERIES

v AMINOSOL - CSP ® - SERIES

v AMINOSOL -G ® - SERIES

v ACTISOLV TM - SERIES

11. Molecular Sieves

•          

v APL is associated with Zeochem for marketing and distribution of their important products in India on indent basis as well as stock and sale basis

Applications

v Process Industry Applications

1.     Natural Gas Processing

2.     Hydrogen Production or Recovery

3.     Basic Petrochemical and Synthesis Gas Processes

4.     Petroleum Refining

5.     Industrial Gases

6.     Chemical Storage

7.     Fuel Ethanol Production

8.     Miscellaneous Petrochemicals

v Industrial Applications

1.     Insulating Glass

2.     Package Protection

3.     Pollution and VOC Control

4.     Polymer Processing

5.     Systems Protection Devices

6.     Medical Oxygen Generation

•          APL Customers:

APL Shareholding Pattern:

APL Share holding Pattern
	% Share holding	% Share pledged
Shareholding of Promoters & Promoters Group	73.16	Nil
Public holding	26.84
Total	100

                                     

Financial:

v Net profit of Amines & Plasticizers rose 106.38% to Rs 4.85 crore in the quarter ended March 2017 as against Rs 2.35 crore during the previous quarter ended March 2016.

v Sales rose 6 % to Rs 79.47 crore in the quarter ended March 2017 as against Rs 74.07 crore during the previous quarter ended March 2016.

v For the full year,net profit rose 58.12% to Rs 15.48 crore in the year ended March 2017 as against Rs 9.79 crore during the previous year ended March 2016.

v Sales rose 13.7% to Rs 297.95 crore in the year ended March 2017 as against Rs 261 crore during the previous year ended March 2016.

Financial Chart:

Risk Management:

1. Financial Risk.

v The two major risks in the financial sector affecting the Company are the foreign exchange fluctuations and higher interest rates on borrowings.

2. Commodity related Risks

v The Company is into manufacturing, trading and dealing of various chemicals which are sensitive in nature. The risks in such product begins from the time of procuring the raw materials till the delivery of the finished goods because of the volatility and nature of the chemicals which always needs special care and attention. The business of the Company is mainly through various tenders opened by the Government and its companies.

Investment Rational:

1.     Robust  106% jump in Net Profit

2.     Robust 49% CAGR growth for the 5 years.

3.     13% CAGR Net sale growth for the 5 years.

4.     7% Net sale jumped in 2017 year.

5.     Amines Market worth 19.90 Billion USD by 2020

v Growth in end-use industries such as personal care, agriculture, water treatment, and petroleum is the driving the demand for amines.

v Among all regions included in the report, Asia-Pacific and RoW are estimated to witness a high growth in the next five years.

v Also, the demand across these regions is reinforced by the emerging markets, namely, China, Brazil, and India.

6.     Personal care to be the largest application of amines by 2020

Hence, the rising personal care industry is indirectly aiding the amines demand.

7. Asia-Pacific is the major driver of amines market

v In 2015, Asia-Pacific accounted for the largest market share and is expected to to register the highest CAGR between 2015 and 2020

v The robust demand in Asia-Pacific is the major driving factor for the amines market.

v China registered the highest demand for amines due to increased consumption of across end-user industries in the last 2-3 years.

v It is also the largest market for amines at a global level.

v Emerging economies such as Brazil, India, Mexico, and others are projected to have a bright future in this market.

8.     Ethylene amines Market worth $2,138.28 Million by 2019

v The Asia-Pacific remain the dominating region in the global market with its growing demand for ethyleneamines in different application segments, especially the resin, paper, automotive, and adhesive.

v The Asia-Pacific market is estimated to grow at the highest CAGR in the next five years, with the allied industries expected to boost the overall business need in the respective regions.

v Asia-Pacific is the largest region, both in terms of volume and value, followed by Europe and North America. India, Russia, Brazil, and South East Asian countries are expected to continue as successful markets

9.     The global ethyleneamines market was estimated to be is $1,364.90 million in 2013, and is projected to reach $2,138.28 million by 2019 expected to grow at a CAGR of 7.81% between 2014 and 2019.

10.  The global amines market (2015-2020) is estimated to reach USD 19.90 Billion by 2020 growing at a CAGR of 8.3% between 2015 and 2020.

11. Growing middle class population in the developing countries resulting in an increase the demand for the cosmetics, toiletries and pharmaceutics

12. Growth of the construction industry and chemical-manufacturing industry as amines are used in masking paints and corrosion resistant paints

13.  Growth of agriculture industry resulting in increase in the demand for agrochemicals

Recommendation:

v Stock is trading  below industry P/E and available at fair value.

v Stock CMP is 49 Rs. and stock  is trading at P/E 18 & EPS 2.81, Based on above all points stock may touch 100 Rs. within a 3 years’ time horizon.

Please note:

v Note: The articles are not research reports but assimilation of information available on public domain and it should not be treated as a research report.

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”

Disclosure: It is safe to assume that I might have the discussed companies in my portfolio and hence my point of view can be biased. Readers should consult registered consultants before making any investments.