DAIKAFFIL CHEMICALS

A debt free company, this small cap company (market cap of Rs.41 crore) is based in Mumbai. It has a manufacturing unit in Tarapur and makes chemicals in technical (no equity) collaboration with Japanese company, Daikaffil.  It is the largest producer of Optical Brighteners for Textiles / Paper / Detergent Industries, Naphthol Grounders for Pigments and Intermediates for Pigment Red 170. Its clientele list includes names like Clariant, KIWA, ERCA spa, DAIKA (Japan). Yet, for all this eloquent credibility, its numbers are so small.

The company ended Q2FY17 with a net profit of Rs.1.16 crore, up 51% (YoY). This was despite a 3% drop in net sales at Rs.7 crore. The lowering of costs by 14% helped boost its EBITDA, which was up from Rs.1 crore to Rs.2 crore and margins more than doubled up from 12.5% to 28.57%.

Promoters holding is not too enthusing at 32.24%, down marginally from 32.28% in June. Equity capital is at Rs.6 crore and annualized EPS for the quarter is at Rs. 6 (FV of Rs.10). Interestingly HGE Chemical SA,Luxemburg had earlier held a 12.5% stake in the company, which it no longer holds.