Shares of this microcap company surged around 15 percent in Tuesday’s trading session after receiving approval from Hindustan Unilever Limited (HUL) for Unit 3 of the Mahad plant. In three months, the stock has delivered more than 20 percent returns to its shareholders.
With a market capitalization of Rs. 183 crores, the shares of Ducol Organics & Colours Ltd started Tuesday’s trading session on a higher note at Rs. 113.95 compared to its previous close of Rs. 110.10. During the trading session, the shares hit a high of Rs. 126.50, gaining around 15 percent and are currently trading at Rs. 125 apiece.
Such a bullish movement in the share price was observed after the company in an exchange filing announced that it had received approval from Hindustan Unilever Limited (HUL) for Unit 3 of the Mahad plant to supply its dispersions for detergents.
Furthermore, it stated that after a detailed SEDEX audit conducted by HUL, it has been approved that the company can commence supplies of dispersion for detergents from its new Mahad plant.
Looking at the company’s financial statements, the revenue increased marginally by 0.6 percent from Rs. 37.57 crores during H1FY24 to Rs. 37.83 crores in H2FY24. On the other hand, the net profits zoomed by 44 percent from Rs. 1.81 crores to Rs. 2.61 crores during the same timeframe.
Ducol Organics & Colours has three manufacturing facilities, with two existing facilities located in Taloja and a new facility in Mahad that is currently in the process of being established.
The Taloja facilities have a combined capacity of 5,500 MTPA, with the first unit capable of producing 3,500 MTPA of Wet Dispersions and the second unit capable of producing 2,000 MTPA of Master Dispersions and 10,000 MTPA of Dry Dispersions.
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 7.05 percent and a return on capital employed (RoCE) of 11.01 percent for the period spanning FY23-24. Furthermore, during FY23-24 the company recorded a net profit margin of 5.87 percent.
According to the latest shareholding pattern, the Promoters maintain control over 57.38 percent of the company’s shares, indicating their significant stake in the ownership. The remaining 42.624 percent is held by Retail Investors or the Public.
Headquartered in Maharashtra, Ducol Organics & Colours manufactures and sells a range of pigment dispersions, preparations, concentrates, paste colourants, and master batches for various industries. These products are used in sectors such as paints, inks, textiles, detergents, paper, rubber, plastics, leather, soaps, and FMCG.
Written By Vaibhav Patil
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