🚩Cmp – 405
🚩Accmulation Zone – 330 To 360
🚩Market Cap – 995 cr
🚩52Wk High/Low – 500/350
🚩One should keep Investment Horizon of 24 to 36 Months.
🚩Expected Target – Bear case 805 & Bull Case – 1200
🔷️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 5,27,900 MTPA 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.
INDIA’S BIGGEST SINGLE LOCATION UPCOMING PLANT
EXECUTION STRATEGY ON TRACK :
🔷️Company has completed 80% of its Expansion.Company is expected to get additional Revenue of 1000 To 1200 crores after completion of plant which is expected in next 1 to 2 qtrs.
GROWTH BY INTEGRATION
AFTER COMPLETION OF PHASE II SAVING OF 197 CRORE P.A
🔷️Company is expecting to save almost 100 crores per Annum on Raw material cost.37 crores per Annum saving by captI’ve utilization of By products for fast moving value added products and almost 60 crores saving per Annum in powere cost.
🔷️Multiple uses to many industries like Agro Chemical,Pharmaceuticals intermediatery,Printing Ink,Pharma,Petroleun Refining,Pigments and Dye intermediates,Textile chemical,Cosmetic and colouring agents,Metal processing,Speciality chemicals,Paints and coating,Preservative for wine paper and Food and many.
🔷️We are expecting Operating Profit Margin to shoot up & are Expected to Grow at CAGR of 35% from Fy20 To Fy22 On Higher Sales volume backed by capacity expansion & as Company is adding new value added products.
🔷️Company has broad based clientele like Cvariant,Sudarshan chemicals,Atul Ltd,Meghmani organic Ltd,Cosmos chemicals and many more.
PROMOTORS COMMITMENT :
1️⃣ Promoter infused equity through warrants: Rs. 69 Crores at Rs. 180 per
2️⃣ Unsecured loans of Rs. 126.9 Crores converted to equity at Rs. 180 Per
3️⃣ Equity (private placement) infusion by Reliance Nippon Life AMC and
Zillow Real Estate: Rs. 41.4 crores at Rs. 180 per share
4️⃣ Equity through warrants to Investor: Rs. 7.2 Crores at Rs. 180 per share
5️⃣ Unsecured loans of Rs. 83.05 Crores converted to Compulsory
Convertible Preferential Share at Rs. 523 Per share
6️⃣ Equity (private placement) infusion by Samena Capital of Rs. 20 crores
at Rs. 523 per share
7️⃣ Promoters NCRPS (Subordinated) : Rs. 151.26 Crores
8️⃣ Un-utilised land of 196,000 Sq mts
9️⃣ Low Financial leverage: Long Term Debt to Equity of 0.45 and Total Debt
to Equity of 0.48
FY19 EPS RS.34
FY20 Expected Eps Rs.38 – 40
FY21 Expected Eps Rs.60 – 66
Currently stock is Trading 10 TIMES FY20 Earning.
🔷️We expect stock to get better valuation in future after expansion plans. 2020 & 2021 would be game changer year 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 Chinese players.
Disc – All Views expresssed are personal and for Educational & Study purpose only. Consult your financial advisor before investing or taking any position based on above article.