RAIN INDS – Again Charging up to shower Rain wealth for investors.

RAIN INDUSTRIES LTD

CMP – 69.50
MARKET CAP – 2337cr
BOOK VALUE – 154
52wk HIGH/LOW – 129/45
5 Year HIGH/LOW – 475/25
FACE VALUE – 2
DIVIDEND YIELD – 1.45%
FY20 EPS – 15

Aggressive Buy – CMP

Safe Player Accmulate bwt – 50 to 60

Stock can Test 140 in next 12 to 18 months and can be 3x – Rs.210 in next 3 years.

On lower side any close BELOW 50 can Drag stock towards new 52wk LOWS.stock has made good Consolidation and base between 55 to 60 levels.

Rain inds has 3 main segment – Cpc Division, Cement & Speciality chemical.Rain inds is Largest manufacturer of CPC & CPT.It currently has 18 Plats in 8 countries.

Last 3 year sales Growth is around 12% and Compounded profit growth us around 24%

Main Products

Speciality Chemical,Carbon And cement

CARBON :

Consists of GPC: essential raw material to create CPC fr the final product which is ALUMINIUM, graphite, carbon blk…
Environment friendly & energy efficient Thanks to investment in flue- gas desulfurization plants (india/ usa).

From future this is really important as this kind of biz has to be highly eco friendly to avoid bans , restrictions, earth saving!

COAL TAR PITCH (CTP):

Is used as imp reducing agent n energy source to produce iron. Is used as binding fr aluminium ind carbon. Thr subsidaries are in … Belgium, Canada, Germany , Russia.

ADVANCED MATERIALS:

Production places: Germany, Netherlands, Canada.

RESINS:

Manufactures hydrocarbon used in coatings, rubber tyres, adhesives, printing inks+ colourless resins.
Produces phenolics used in leather treatment, electric wire n pharmaceuticals.

ENGINEERED PRODUCTS:

Innovative carbores & petrores used in LITHIUM ION BATTERIES, energy storage & petrochemical based pavement sealer.

PETROCHEMICAL:

Necessary fr pig- iron & steel production. Works as solvent fr inks n paints.

NAPHTHALENE:

Produces SUPERPLASTICIZERS used fr wallboard, ind n agricultural applications, produces surface modifiers, coating industrial floors, cable joints n water based adhesives.

INNOVATIVE DEVELOPMENT:

Demand has increased due to ecofriendly characteristics. The construction of hydrogenated hydrocarbon resins in Germany will produce WATER WHITE RESINS-

Changing Regulations :

Growing demand consumer n cmpny fr CLEANER AND SAFER RAW MATERIAL FR FOOD PACKAGING AND SANITARY PRODUCTS.

CEMENT

– Leading cement in South India
– production of ordinary & portland cement.
– ideal for construction industry : high rise bldgs, slabs, roofs…
Plus residential bldgs, dams, roads…

Again is ecofriendly- consumes less energy to manufacture, reduces PRODUCTION COSTS!

They practically have a diversified profile:

STRENGHTS:

– Leading producers carbon / chemical products

– Experienced Management

– Longterm benefit in demand growth of aluminium

– continuos products improvements

– eco- friendly energy thru waste heat recovery- RAIN is the only Calciner in the world with revenues frm waste heat revovery!

– Good relationship with suppliers n customers

– Diversified portfolio

– world class asset Base

– Completition of expansion projects in Belgium n Russia

– De- leveraging Balance Sheet

Few Negative points

GPC – green Petroleum Coke very important raw material that is imported from out.
Company will suffer if theres problem in supply demand of ths GPC

From this you can create CPC & final product aluminium.
Other manufacturers are : Hindalco, Vedanta & Nalco

Disc – All views expressed are personal and only for Educational and study purpose.consult your financial advisor before investing or taking any position based on above article.

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