Borax Morarji Ltd Sector Industry

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1 Page 1 of 5 Company Profile Borax Morarji Ltd was incorporated on ugust 27, 1963 in Mumbai and commenced business on September 21, It was originally promoted jointly by The Bharamsi Morarji Chemical Co. Ltd., a large scale fertilizer and chemical manufacturer and Borax Holding Ltd (UK) apart of the Rio Tinto Group, US with an objective to undertake the manufacturing of various types of Heavy Inorganic Chemicals. It offers a range of quality products at a reasonable price. This has enabled the company to maintain its market share at 75% of the Indian boron chemicals market. The promoter group holds about 63.7% of the total shareholding, while the rest of the shareholding lies with institutional (0.7%) and non-institutional shareholders (36.3%). Stock Price Last Close Price (25/01/2016) Market Cap (Cr.) (31/12/2015) Price in Rs. 52 Wk High/Low 47.95/21.10 vg. Volume (1 Mo) (Rescaled to 100 for ease of comparison) Mr. L. N. Goculdas is the Chairman of the company, H T Kapadia is Chief Executive Officer and Manager, and Dilip S Nagle is the Company Secretary and Compliance Officer of the company. Business Overview Borax's operations relate to manufacture of Boron Based Chemicals and Wind Power Generation. It has been manufacturing boron based chemicals at mbernath near Mumbai, since Glass, Ceramic and Pharmaceutical Industries are the major consumers of boron chemicals. The nnual production capacity for all grades of Borax and Boric cid are Metric Tonnes and 8000 Metric Tonnes respectively. The company has setup two Windmill Farms consisting of 7 Wind Turbine Generators having a total generation capacity of 1.75 Megawatts. Power from the Windmills is used for internal consumption and for sale to the grid. The company is an active supporter of efforts to promote nonconventional energy sources. The company earns 99.4% of its total revenue from chemical division. The long-term outlook of the company s products continues to be encouraging but the shortage of working capital finance and nonavailability of raw material has adversely affected the performance of the company. With a view to overcome these difficulties, Management has now developed additional new sources of supplies for raw materials which are expected to reduce cost of raw materials and improve the supply chain efficiency. The company is also contemplating Custom manufacturing of speciality chemicals at Dahej. Financials Revenue Gross Margin % Operating Income Operating Margin % Diluted EPS Book Value Per Share Operating Cash Flow Capital Expenditure Free Cash Flow Profitability 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 25-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 25-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 Borax's total revenues dropped by 19.3% to INR crores in FY 2013 as compared to a year ago. The main reason for the lower turnover during the year is uneven availability of raw material as also the increased cost of imported raw material and resultant pressure on cash-flow. Though the company has been able to transfer the major increase in the cost of raw material to the customers, this has an adverse effect on the total sales of the company. The company's net loss stood at INR 2.92 crore in FY 2013, registering a decline of 1.7% as compared to the previous year. Revenue Growth Key Risks Borax's risks include fluctuations in the Indian Rupee rates versus other currencies, fluctuation in commodity prices, shortage of working capital finance, non-availability of raw material and slowdown in domestic and global economy. It s most significant exposure relates to the US Dollar, since the key raw material, Fluorspar is imported. Gross Margin Competitors Tata Chemicals Ltd and Diamines nd Chemicals Ltd are two of the competitors of the company. Tata Chemicals Ltd is a global company with interests in businesses that focus on life: living, industry and farm essentials. It is the world s second largest producer of soda ash with manufacturing facilities in sia, Europe, frica and North merica. The company s industry essentials product range provides key ingredients to some of the world s largest manufacturers of glass, detergents and other industrial products. Tata Chemicals revenue rose by 8.23% in FY 2015 to INR crores versus last year. DCL has been the pioneer and the only one in manufacturing of a range of Ethyleneamines (Es) in India. It has evolved products manufactured 'first time' in India and also pioneered to 'develop' a market for the same. Over the years, the company has established its own presence in the market and is successfully catering to the needs of Industries. The company's revenue fell by 11.01% to INR crores in FY 2015 versus last year. Operating Margin Report as of 25-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 The chemical industry in India is a key constituent of Indian economy, accounting for about 2.11% of the Gross Domestic Product. In terms of volume of production, Indian chemical industry is the third largest producer in sia and sixth largest in the world. Indian chemical industry generated business worth INR crores in Bulk chemicals account for 39% of the Indian chemical industry, followed by agrochemicals (20.3%) and specialty chemicals (19.5%). The wind power industry is involved in the design, manufacture, construction, and maintenance of wind turbines. lthough the industry is small compared to those of the conventional power generation technologies including hydro, coal, natural gas, and nuclear, it is growing at a much faster rate. 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 25-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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