SEYA INDS – Future Expansion

👉Cmp – 460

👉Accmulation Zone – 400 To 460

👉Market Cap – 1120 cr

👉TF – 24 to 30 Months.

Expected Target Bull case – 1280

Expected Target Bear Case – 805

Expected Returns – 300%

👉Seya Industries in a leading player in chemical industry. Engaged in manufacturing & Exports Of Rubber Chemicals intermediates,Agro Chemical ,Pigments & pharma.

👉Seya Industries was incorporated in 1990 as SOCIL – Sriman Organic Chemical Industries Ltd with Capacity of 14500 MT Of Benzene Based Chemicals.

👉Currently Company has expertise in Nitro chloro Benzene & Chloro Benzene Value chain products.

👉Company is under going Ambitious expansion plan globally.Company has expansion plan of 4,44,000 MT which is valued at around 750 cr Approx.

👉Company is Diversifying into Sulphur trioxide based specialty chemicals, Thionyl Chloride, Di Methyl Sulphate . These products have good demand from pharma, preservatives in food industry, agrochemicals, Fabric Softner.

Capital Expenditure

👉We are expecting Operating Profit Margin to shoot up & are Expected to Grow at CAGR of 35% from Fy19 To Fy21 On Higher Sales volume backed by capacity expansion & as Company is adding new value added products.

👉Valuation:

FY19 Expected EPS RS. 27- 28

FY20 Expected Eps Rs.54 – 55

FY21 Expected Eps Rs.64 – 66

Currently stock is Trading 8.5 TTM FY20 Earning.

We expect stock to get better valuation in future after expansion plans. 2020 & 2021 would be game changer for Company.

👉KeyRisk & Verticals

For Seya Inds currency remains the key risk. Raw materials are indigenously procured but export competitiveness can be impacted in the scenario of sharp appreciation in local currency. Sourcing risk of raw materials is increasingly covered with the backward integration plans.

Major threat is from Domestic player & from Chineseplayers.

👉All Views expresssed are for Educational & Study purpose. Consult your financial advisor before investing.