Multibagger Alert: This speciality chemical company has given investors a return of 231% in the past year

On a YTD basis, the stock has given a return of 241%.

Leading manufacturer of aliphatic amines and speciality chemicals in India, Balaji Amines Limited has given investors stellar returns of 231.4% over the last year. The share price stood at Rs 953.75 on November 18, 2020, and since then, the stock has more than tripled investor wealth.

Balaji Amines manufactures, sells and exports methylamines, ethylamine and derivatives of speciality chemicals and pharma excipients in India. The firm serves pharmaceuticals, agrochemicals, refineries, paints, water treatment chemicals, dyes, coatings, polymers, textiles, personal and home care, animal nutrition etc.

On a standalone basis in Q2, Balaji Amines reported robust revenue of Rs 435.12 crore, which was up 54.92% YoY driven by higher realizations. Operating profit came 41.31% higher YoY to Rs 102.06 crore. Operating margins contracted to 22.49% from 24.85% due to high raw material prices and increased power and fuel cost. PAT was reported at Rs 69.59 crore was up 46.01% YoY. The management of the company expects better H2FY22 performance and have guided for 8-10% volume growth in the amine business of the company into consolidated revenue guidance of Rs 1800-1850 crore in FY22.

The global amines industry is expected to reach US$ 20.8 billion by 2025, registering a CAGR of 3.6%. The oligopolistic nature of the industry leaves a country with just a handful of producers catering to the majority of the demand in the region. The increasing trend of industrialization and expanding manufacturing sector, coupled with factors such as growing population and rapid urbanization are likely to have a positive impact on the demand for amines in the years to come.

Moreover, due to stricter environmental norms, tighter financing, and consolidation, the structure of China’s chemical industry is changing causing uncertainty for international players that source chemicals from China. This has created opportunities for Indian chemical companies to ensure uninterrupted supply. This coupled with stringent policies in regulatory norms, slow economic growth and the rising cost of labour across the globe has improved the sales volume of domestic chemical manufactures such as Balaji Amines.

At 1.15 pm on Monday, the stock is trading at Rs 3040.85, down by 3.79% or Rs 119.90 per share on BSE. The 52-week high of the scrip is recorded at Rs 5,220 and the 52-week low at Rs 850 on the BSE.