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Please refer to important disclosures at the end of this report
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1
Gujarat Alkalies and Chemicals Ltd (GACL) is the largest independent
producer of caustic soda in the country with an installed capacity of 412,500
metric tonne per annum (MTPA) as on March 31, 2017 at its plants in
Vadodara and Dahej in Gujarat. GACL has gradually built its leadership
position through continuous expansion of production capacities to cater to
the growing demand for its products over the last three decades. The
operations of GACL are well-integrated with by-product of one process being
used as raw material for another process, enabling the company to optimally
utilize its large production capacity. GACL’s products find application across
diverse range of industries. GACL has planned own capex of ~ `1,721cr
over FY17-21 which is expected to be funded by debt of `828cr and the
balance through internal accruals. However, with strong cash accruals and
low debt repayment liabilities, GACL is expected to fund the same with
reasonable comfort. GACL has reported revenue and bottom line growth of
4% & 13% respectively over FY2012-17 and also operating margins has
improved from 16.37% in 2015 to 23.84% in FY17.The cash flows has also
improved from `348.04cr in FY12 to `503.31cr in FY17. The company has
a ROE of 9.34% and currently trading at valuation PE 16.07x of TTM
earnings. Hence BUY.
BUY
CMP `755
0.7
Reuters Code
GALK.NS
GALK:IN
10
BSE Sensex
33,442
Nifty
10,328
Face Value (`)
Commodity Chemical
Market Cap (` cr)
5,529
52 Week High / Low
818.1/321.35
Avg. Daily Volume
33,495
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Gujarat Alkalies and Chemicals Ltd
Others | Commodity Chemicals
Dec 15, 2017
2
Gujarat Alkalies & Chemicals Ltd |Commodity Chemicals
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Gujarat Alkalies
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)