Reviews

In this edition, we have reviewed Indo Amines and Tata Metaliks. We suggest our reader-investors to BOOK PROFIT in both Indo Amines and Tata Metaliks.

We had recommended Indo Amines in the issue no. 10 dated Apr 17–30, 2017 when the scrip was trading at Rs 80.50. Our recommendation was backed by strong financial performance in the last five financial years of the company and its attractive valuations. The company has also received nod for sale of 10 products in the US market. 

Indo Amines Ltd (IAL) is a manufacturer, developer and supplier of fine chemicals, speciality chemicals, performance chemicals, perfumery chemicals and active pharmaceuticals ingredients (APIs). It was incorporated in 1994 as a public limited company. The company has four manufacturing sites in Baroda, Dombivali, Rabale and Dhule. The products manufactured by Indo Amines find applications in various industries, such as pharmaceuticals, agrochemicals, fertilizers, petrochemicals, road construction, pesticides, perfumery chemicals, dyes and intermediates, among others. 

On a quarter-on-quarter basis, IAL has reported robust numbers. In Q4FY17, the net sales of the company stood at Rs 79.91 crore, an increase of 19.74 per cent as compared to Rs 66.74 crore in Q4FY16. Its operating profit also increased by 9.78 per cent to Rs 10.16 crore in the fourth quarter ended March 2017, as against Rs 9.26 crore in corresponding quarter last year. The company’s PAT in Q4FY17 stood at Rs 3.98 crore, up by 52.88 per cent in comparison to Rs 2.60 crore in Q4FY16. 

On an annual basis, the company’s net sales stood at Rs 278.88 crore, up by 14.89 per cent in FY17, as against Rs 242.73 crore of FY16. IAL’s operating profit increased by 23.67 per cent to Rs 36.62 crore in the financial year 2017, as compared to Rs 29.61 crore of last year. 

The company reported an increase in profit after tax by 63.56 per cent to Rs 14.05 crore, in comparison with previous year’s Rs 8.59 crore. After our recommendation, the share price of Indo Amines has increased by over 21.73 per cent. We recommend our reader- investors to book profit in the stock.

We had recommended Tata Metaliks in issue no. 9 dated April 3-16, 2017, under ‘cover story’ section when the scrip was trading at Rs 527. 

Our recommendation was backed by the company’s successful endeavour to cut down total debt-to-equity ratio and interest coverage ratio, along with the wearing effect of demonetization. 

Tata Metaliks, a Tata Steel subsidiary, is a leading player in the ductile iron pipes manufacturing industry. The company also produces foundry grade pig iron, besides manufacturing and selling scrap pig iron and granulated slag. It offers a range of end-to-end technical services, including charge mix and melting, core making, spheroidal graphite (SG) iron production and development, project based consultancy, pollution control, customised training and testing facility. The company produces 500,000 tonnes of hot metal annually. 

On the financial front, Tata Metaliks’ revenues rose 59.86 per cent to Rs 706.05 crore in H2FY17 as compared to the same period in the previous financial year. The company’s operating profit also rose 71.39 per cent to Rs 118.67 crore in H2FY17 on a yearly basis. Its net profit also increased 60.15 per cent to Rs 59.88 as compared to the same period in the previous fiscal. 

After our recommendation, the share price of Tata Metaliks soared more than 44 per cent on hike in coal and coking coal prices. The stock is trading at its peak, We recommend investors to book profit.