Dai-Ichi Karkaria Ltd Sector Industry

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1 Page 1 of 5 Company Profile Dai-Ichi Karkaria Ltd was incorporated on May 13, The company commenced commercial production in technical collaboration with Dai-Ichi Kogyo Seiyaku Co. Ltd., Japan. It was established by Dhunjishaw Neterwala. The Company has a joint venture with CTI Chemicals sia Pacific Pte. Ltd., Singapore and the joint venture is known as Champion Dai-ichi Technologies India Limited. It is a mid-cap company operating in the chemicals sector. The company is engaged in manufacturing and sale of specialty chemicals. The company has 42 years of experience in the development and manufacturing of high performance specialty chemicals for different applications. Dai-Ichi Karkaria s current senior management includes Ms. S.F. Vakil as the Chairperson & Managing Director of the company. Stock Price Last Close Price (18/01/2016) Market Cap (Cr.) (31/12/2015) Price in Rs. 52 Wk High/Low / vg. Volume (1 Mo) (Rescaled to 100 for ease of comparison) The company s registered office is located at Mumbai, Maharashtra. Its manufacturing plants are located Kasarwadi and Kurkumbh, Pune and Champion Dai-ichi Technologies India Limited at Jejuri, Pune. The promoter family holds about 54.5% of the total shareholding, while the rest of the shareholding lies with non-institutional shareholders. Business Overview Dai-Ichi Karkaria Ltd is engaged in manufacturing of specialty chemicals. Its products include chemicals colourants, construction, cosmetics and pharma application, electronic and electrical, leather chemicals, oil field chemicals, and among others. Surfactants and Specialty polymers are used as Emulsifiers, Dispersing agents, Wetting agents, Defoamers and Detergents in Paints and Pigments, dhesives, Polymers and Lattices, and as functional intermediates for the Textile, Metal Treatment and Pesticide industries. It manufactures complex molecules and formulations like Spin Finishes, dditives for the Rayon industry and selected Polymers for the Oil industry like Pour Point Depressants. The company is optimistic on its construction chemical portfolio and optimistic on the industry outlook going ahead. Financials Revenue Gross Margin % Operating Income Operating Margin % Diluted EPS Book Value Per Share Operating Cash Flow Capital Expenditure Free Cash Flow Profitability verage Values unless stated Return on ssets % Return on Equity % sset Turnover Net Margin % Financial Leverage Financial Health except Debt/Equity (Ratio) Long Term Debt Total Equity Debt/Equity Working Capital Report as of 19-Jan Initiative of the BSE Investors Protection Fund Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.

2 Page 2 of 5 Income Statement Total Revenue Cost of Revenue Gross Profit Operating Expense Operating Income Pre-tax Income Tax Provision Minority Interests Balance Sheet Stock Holders Equity Long Term Debt Total Non-Current Liabilities Payables Total Liabilities Net PPE Goodwill and other Intangible ssets Total Investments Total Non-current ssets Trading and Other Receivables Inventory Cash and Cash Equivalents Total ssets Cash Flows Depreciation and mortization Change in Working Capital Operating Cash Flow Capital Expenditure Investing Cash Flow Net Common Stock Issuance Net Issuance Payments of Debt Cash Dividends Paid Financing Cash Flow Changes in Cash Report as of 19-Jan Initiative of the BSE Investors Protection Fund Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.

3 Page 3 of 5 Financial Performance In FY 2015, the company s total revenues grew by 22.8% to INR 181 crores versus a year ago. This growth was driven by increase in the sales volumes. Operating margin of the company increased by 753 basis points to 16.2% versus the last year. This increase is due to the improvement in product mix towards higher value-added products, higher capacity utilization and cost efficiency programs. Net income increased by a whopping 49% to INR 23.3 crores versus a year ago. Revenue Growth Key Risks Risks include deterioration in global economic growth, increase in the price of raw material such as styrene monomer, fall in the product prices, fluctuation in currencies, slowdown in the consuming industries, slowdown in the infrastructure activity, change in the government or regulatory policy. Gross Margin Competitors Pidilite Industries Ltd and Premier Explosives Ltd are two of the company s key competitors. Pidilite Industries Ltd is engaged in the manufacturing of adhesives and sealants, construction and paint chemicals. Its products include wood finishes and paints, construction chemicals, fabric care, leather chemicals, textile chemicals, etc. The company s office is located in Mumbai, Maharashtra with several branches at hmedabad, Chandigarh, Delhi, Kanpur, Nagpur, Chennai, and Bengaluru. Pidilite s revenue increased by 13.1% to INR crores in FY 2015 as compared to last year. Premier Explosives Ltd is engaged in the manufacturing of explosives and accessories. Its products include emulsion and slurry explosives, ID cartridge explosives, detonating cord, propellants and bulk explosives, etc. The company s corporate office is located at Secunderabad. Premier s revenue increased by 2.8% to INR crores in FY 2015 versus the last year. Operating Margin Report as of 19-Jan Initiative of the BSE Investors Protection Fund Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.

4 Page 4 of 5 Industry Overview Specialty chemicals are produced by a complex, interlinked industry. In the strictest sense, specialty chemicals are chemical products that are sold on the basis of their performance or function, rather than for their composition. They can be single-chemical entities or formulations (combinations of several chemicals) whose composition sharply influences the performance and processing of the customers product. Products and services in the specialty chemicals industry require intensive knowledge and ongoing innovation. Globally, speciality chemical industry size is pegged at more than USD 750 billion. Indian speciality chemicals market is estimated at more than USD 23 billion. The growth in India has been in double digits, much higher than the world average owing to faster growth in end user industries such as speciality polymers, paints and coatings and others. Inspite of economic challenges faced by the company in the past year, the demand for Specialty Chemicals and Polymers continues with the growing population. In addition, low per capita consumption in various industry segments, augers a huge potential for the Specialty Chemical Industry. Price/Earnings Trailing Returns Quarterly Results except EPS (Rs.) Revenue Other Income Total Income Expenditure Interest PBDT Depreciation PBT Tax Net Profit Equity EPS CEPS OPM (%) NPM (%) *Standalone figures Return on Invested Capital (ROIC) Report as of 19-Jan Initiative of the BSE Investors Protection Fund Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.

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