Page 1 of 5 Company Profile Vidhi Dyestuffs Manufacturing Ltd was incorporated on January 19, 1994 with the name Vidhi International Private Ltd. The company was converted into a Public Limited Company under the name Vidhi Dyestuffs Manufacturing Ltd in the year 1995. It is a small cap company operating in paints and pigments sector. The company is a manufacturer of synthetic and natural food grade colours and preservatives. Vidhi s current senior management includes Mr. Bipin M Manek as the Chairman & Managing Director of the company and Mihir B Mane as the joint Managing Director of the company. Mr. Bipin M Manek has managed the company for more than 20 years now. Stock Price Last Close Price 72.00 (08/01/2016) Market Cap (Cr.) 382.83 (31/12/2015) Price in Rs. 52 Wk High/Low 80.25/16.00 vg. Volume 97458.92 (1 Mo) (Rescaled to 100 for ease of comparison) Its manufacturing facilities are spread over 1,76,000 acres, located in Dhatav Village of Raigad District in the state of Maharashtra, India. The facilities are audited and certified by US Food and Drug dministration (FD). The company s registered and corporate office is located at Tardeo road, Mumbai. During the FY 2015, the company employed 40 permanent employees. The promoter family holds about 64.3% of the total shareholding, while the rest of the shareholding lies with non-institutional shareholders. Business Overview Vidhi Dyestuffs Manufacturing Ltd is a manufacturer of synthetic and natural food grade colours and preservatives. It provides customers colour solutions in applications for various industries such as food and beverage, confectionary, pharmaceuticals, feeds, cosmetics, inkjet inks and salt free colour. bout 91.4% of colours manufactured by the company are exported in over 70 countries across six continents. The management expects a gain in its market share and a steady increase in the demand for its colours over the next few years. Financials Revenue 98.62 114.54 119.99 142.76 188.77 Gross Margin % 17.07 15.21 12.02 17.07 10.99 Operating Income 6.04 5.00 6.36 9.12 19.27 Operating Margin % 6.12 4.36 5.30 6.39 10.21 Diluted EPS 0.74 0.67 0.83 1.20 2.49 Book Value Per Share 5.16 5.16 6.27 6.96 8.20 Operating Cash Flow -4.96 1.47 3.72 6.74 17.20 Capital Expenditure -6.67-7.33-3.89-0.69-9.91 Free Cash Flow -11.63-5.86-0.17 6.05 7.29 Profitability Return on ssets % 0.07 0.05 0.05 0.06 0.11 Return on Equity % 0.15 0.12 0.14 0.18 0.31 sset Turnover 1.79 1.54 1.37 1.48 1.63 Net Margin % 0.04 0.03 0.03 0.04 0.07 Financial Leverage% 2.58 2.84 2.87 2.79 2.89 Financial Health except Debt/Equity (Ratio) Long Term Debt 26.75 4.03 2.74 2.19 1.98 Total Equity 25.76 29.14 32.28 35.92 45.22 Debt/Equity 1.04 0.14 0.08 0.06 0.04 Working Capital 41.43 15.31 15.85 20.29 21.41 Report as of 09-Jan-2016. Initiative of the BSE Investors Protection Fund. 2016 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
Page 2 of 5 Income Statement Total Revenue 98.62 114.54 119.99 142.76 188.77 Cost of Revenue 81.79 97.11 105.57 118.39 168.03 Gross Profit 16.83 17.42 14.42 24.37 20.74 Operating Expense 12.35 12.60 8.38 15.63 2.27 Operating Income 6.04 5.00 6.36 9.12 19.27 Pre-tax Income 6.04 5.00 6.36 9.12 19.27 Tax Provision 2.35 1.63 2.21 3.15 6.85 Minority Interests - - - - - Balance Sheet Stock Holders Equity 25.76 29.14 32.28 35.92 45.22 Long Term Debt 26.75 4.03 2.74 2.19 1.98 Total Non-Current Liabilities 26.75 4.62 3.85 3.37 3.19 Payables 9.59 12.70 14.77 17.08 28.62 Total Liabilities 40.76 53.49 60.52 64.35 85.66 Net PPE 10.95 17.31 38.50 17.94 25.71 Goodwill and other Intangible ssets - - - - - Total Investments 0.14 0.13 0.13 0.13 0.13 Total Non-current ssets 11.09 18.45 20.28 19.00 27.00 Trading and Other Receivables 40.13 43.79 46.21 50.25 57.41 Inventory 12.63 14.31 21.04 26.38 38.40 Cash and Cash Equivalents 2.68 5.19 3.84 3.42 6.81 Total ssets 66.53 82.63 92.80 100.27 130.88 Cash Flows Depreciation and mortization 0.92 0.94 1.73 1.97 1.63 Change in Working Capital -13.19-5.56-8.13-6.45-5.34 Operating Cash Flow -4.96 1.47 3.72 6.74 17.20 Capital Expenditure -6.67-7.33-3.89-0.69-9.91 Investing Cash Flow -6.43-7.11-3.59-0.41-9.58 Net Common Stock Issuance - - - - - Net Issuance Payments of Debt 14.63 11.95 4.06 0.74 3.18 Cash Dividends Paid - - -1.00-2.00-1.25 Financing Cash Flow 12.37 8.15-1.49-6.60-4.18 Changes in Cash 0.97 2.51-1.36-0.27 3.44 Report as of 09-Jan-2016. Initiative of the BSE Investors Protection Fund. 2016 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
Page 3 of 5 Financial Performance Vidhi s total revenues grew by 32.2% to INR 188.8 crores in FY 2015 versus a year ago. This growth was driven by an increase in sales volume of synthetic food colours by 19% to 2275 tons versus the last year. Operating margins increased by a whopping 382 basis points to 10.2% versus the last year. The increase in operating margin is due to increase in other income and higher capacity utilization. Net income jumped by 108% to INR 12.4 crores versus the previous year. Revenue Growth Key Risks Risks include appreciation in Indian Rupee versus other currencies, particularly, Yuan, USD and Euro; increase in price of furnace oil, cost of power, fuel cost and other input costs. The appreciation in the Indian Rupee could slow down the pace of shifting volumes due to weakening of price advantage, thereby, posing threat to growth. The company is also exposed to the risk of global slowdown as more than 90% of the revenue is derived from exports. The company is also exposed to the uncertainty around the change in regulatory policy by various regulators such as US FD and the other regulators in its export markets. 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. Pidilite s revenue increased by 13.1% to INR 4844.1 crores in FY 2015 as compared to last year. The company s office is located in Mumbai, Maharashtra with several branches at hmedabad, Chandigarh, Delhi, Kanpur, Nagpur, Chennai, and Bengaluru. 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. Premier s revenue increased by 2.8% to INR 149.5 crores in FY 2015 as compared to last year. The company s corporate office is located at Secunderabad. Operating Margin Report as of 09-Jan-2016. Initiative of the BSE Investors Protection Fund. 2016 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
Page 4 of 5 Industry Overview Indian colour industry accounts for about 12% of the global colour industry and is pegged at about USD 5 billion. The Indian industry is highly fragmented as there are about 950-1000 dyestuff and intermediate manufacturing units in the country. Out of the above, about 5% are in large and organized sector while remaining are in unorganized sector. bout two third of the Indian industry output is exported and has largely contributed to double digit revenue growth seen over the last decade. This growth has also been accompanied with increase in regulatory costs such as cost of handling effluents. However, the enforcement of cleaner regulations has helped the organized sector gain market share over the last few years in India. Vidhi has successfully entered the field of food colours to primarily cater to niche applications. The natural food colour segment is expected to dominate the market with Europe and sia Pacific emerging as the fastest growing regions within this market. The shift in trend towards natural food colour is largely due to the stringent government regulations concerning the safety issues arising from usage of synthetic food colours. Price/Earnings Trailing Returns Quarterly Results except EPS (Rs.) Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Revenue 49.04 48.77 50.20 60.05 38.68 Expenditure -23.20-41.23-41.74-52.95-33.30 Interest -1.54-1.45-1.80-1.53-1.38 PBDT 24.30 6.09 6.66 5.56 3.99 Depreciation -0.36-0.48-0.44-0.46-0.50 PBT 23.94 5.61 6.22 5.10 3.49 Tax -1.30-1.70-2.64-2.01-1.26 Net Profit 2.78 3.55 3.72 3.80 2.41 Equity 5.00 5.00 5.00 5.00 5.00 EPS 0.06 0.07 0.07 0.08 0.05 Return on Invested Capital (ROIC) *Standalone figures Report as of 09-Jan-2016. Initiative of the BSE Investors Protection Fund. 2016 Morningstar. ll Rights Reserved. Please refer to the disclaimers on the last page of this report.
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