AMAL LTD

This Gujarat based company, which manufactures Sulphuric Acid, Oleum, Sulphur Dioxide etc, used primarily in Chemical and Dyestuff industries, posted a 3.5 times jump in its Q3FY17 net profit at Rs.4.5 crore. This was on a 38%(YoY) jump in net sales at Rs.9 crore. The 30% drop in raw material costs helped and overall expenses dropped 10%. EBITDA was up by a whopping 200% at Rs.4.5 crore and margins more than doubled up from 21% to 50%.

It’s a debt free company and equity stands at Rs.7 crore. Annualised EPS stands at Rs.16 (FV of Rs.10). Its 9MFY17 net profit is at Rs.8.5 crore, which is over 100% more than FY16 net profit of Rs.4 crore.

In our Market Whisper column, Editor, Mr.SP Tulsian says, company has come in this Rs. 6/quarter EPS trajectory since Q2FY17 and is likely to post an EPS of over Rs.16 for FY17, leading to a PE multiple of just 4x, which can make stock move close to Rs. 85 in the next 3 months. Buy as an investor.”