Basic analysis of balaj amine
Basic analysis of Balaji Amine: Technological advancements and sustainable development have been able to add value to the growth of the chemical industry. The chemical industry has enormous potential to expand its business. Every aspect of life requires the use of chemicals, and as environmentally acceptable chemicals become available, the growth of the industry will be limitless.
Chemicals are essential to reach the final product. In this article, we take a look at Balaji Amines, who operates in the chemical industry.
Fundamental Analysis of Balaji Amine – Company Overview
Establishment of KPR Group Balaji Amin We started producing methylamine in 1988. Later they added ethyl amine to their product portfolio. In 1989, they commissioned an aliphatic amine manufacturing unit at Solapur. They started manufacturing dimethyl amine hydrochloride in 1995 and were the world’s largest producer of this particular product.
The company has five manufacturing facilities, three in Maharashtra and two in Telangana. Balaji Amines is also into the hotel business and owns one hotel in Solapur. The MTPA installed capacity is approximately 2,31,000. They have over 830 customers with a team size of over 111.
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Some of the more than 30 products include diethylamine, dimethyl amino ethanol, triethylamine, monoethylamine, and diethyl amino ethanol. We also offer specialty chemicals such as gamma-butyrolactone, dimethylformamide, pyrrolidone, morpholine, and N-methyl.
segment analysis
Balaji Amines accounted for 98.88% of FY23 operating revenue from segments such as chemicals (up 1% YoY) and the remaining revenue was from hotels (1.10%, up 55.78% YoY). They generate revenue from India accounting for 77.68% in FY23 and the remaining 22.31% from outside India in FY23. They have an international presence in 51 countries.
industry analysis
Globally, the industry is currently experiencing headwinds due to import dumping from market powerhouses such as China, which is experiencing an economic downturn and slowing growth. Despite the headwinds, India is the world’s third largest consumer of polymers, fourth largest pesticide producer and sixth largest chemical manufacturer.
India’s chemical sector accounts for 3.4% of the global chemical industry. The value of India’s chemicals sector is expected to increase to $220 billion in 2022, $300 billion in 2025, and $1 trillion by 2040.
India’s specialty chemicals sector is expected to grow from $32 billion in 2019 to approximately $64 billion by 2025. Compound Annual Growth Rate (CAGR) is 12.4%. India contributes 7% to GDP and ranks sixth in the world and third in Asia in terms of chemical production. Here we have used Balaji Amine’s fundamental analysis to learn about Balaji Amine’s company overview.
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Fundamental Analysis by Balaji Amines – Finance
Sales and Net Profit
Balaji Amines reported operating revenue of Rs. 2,355.40 crore in FY23, up 1.4% from Rs. 2,322.88 crore in FY22. Net profit decreased by 2.92% to 100 million won. 417.90 crore in FY22 to Rs 456.8 billion in FY23.
Revenue in FY23 was flat compared to FY22 and net profit declined in FY23. Manufacturing costs increased compared to sales. The flat increase in sales and decrease in net profit was due to lower demand from the industry, which affected sales volume. expense inflation It also contributed to the company’s poor performance, following the Chairman’s message.
profit
The company’s operating profit margin in FY23 was 26.34% compared to 27.27% in FY22. Net profit margin decreased from 17.88% in FY22 to 17.11% in FY23.
A slight increase in material costs impacted margins. However, the company was able to maintain margins between 26% and 29%. Net profit margins have been impacted due to slowing growth, but over the past five years, the company has been able to increase its margins from 10.36% in FY20 to 17.11% currently.
rate of return
RoE stood at 28.93% in FY23 compared to 38.98% in FY22. RoCE decreased by 38.97% in FY23 compared to 49.66% in FY22. In the last three years, RoE has been around 31% to 39% and RoCE has been around 34% to 50%.
RoE declined in FY23 due to lower net profit. This resulted in a negative return on additional capital or reserves. RoCE has followed the same trend as RoE and returns have been impacted, but returns are at a comfortable level.
debt analysis
Balaji’s debt-to-equity ratio was 0.06 in FY23 compared to 0.11 in FY22. Interest coverage in FY23 increased from 34.82 times in FY22 to 48.35 times in FY23. The company’s D/E improved in FY23 and was at a low level. Reducing borrowings helps expand facility investment and improve returns in a high interest rate environment.
Highest level of interest coverage in FY23. Despite a slowdown in net profit growth compared to the same period last year, the ratio improved due to a slight increase in depreciation and a decrease in interest expense. Now we have come to the end of the fundamental analysis financials of Balaji Amines.
Basic Analysis of Balaj Amine – Key Indicators
Let’s take a look at Balaji Amine’s key metrics.
Basic Analysis of Balaji Amine – Future Plans
- The company recently received clearance for 90 acres of land in Solapur for greenfield projects strategically located with customers in western and southern India.
- Phases 2 and 3 involve a capital expenditure of Rs. 300-350 crore over FY24 and FY25 and is expected to be largely funded through internal accruals.
- Balaji Amines plans to expand its product portfolio by launching products in the market. n-butylamine of Q4FY24, methylamine of Q2FY25 and dimethyl ether Until H1FY25.
- We have been commissioned to expand our production capacity to produce n-butylamine, methylamine and dimethyl ether within the next 12 months.
- We are planning to install a solar power plant in Solapur.
- We plan to increase our export share from 15-17% to 25-30% within the next 1-2 years.
- Dimethyl carbonate could play an important role in entering the lithium and battery sectors.
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conclusion
Fundamental Analysis of Balaji Amines At the end of the article, let’s take a brief look at Balaji Amines. Balaji Amines is performing better, but its earnings have been impacted by sector headwinds. Balaji Amines is reeling from some corporate governance issues, including a delay in announcing Q1 2024 results and the resignation of an independent director, and the company’s governance is expected to be weak.
The poor performance compounded the problems, which were also reflected in the stock price. The stock price has been corrected by about 50% from its all-time high. What do you think about the potential of this company? Let us know your thoughts in the comments below.
Written by Santosh
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