Fundamental Analysis Of Balaji Amines: Technological advancements and sustainable development enabled value unlocking to the chemical Industry’s growth. The Chemical Industry has tremendous potential to upscale its business. Every aspect of life requires its use, and as environmentally acceptable chemicals emerge, the industry’s growth will be unlimited.

Chemicals are essential to arrive at the end product. In this article, we will look at Balaji Amines which operates in the Chemical Industry.

Fundamental Analysis Of Balaji Amines – Company Overview

Fundamental Analysis Of Balaji Amines

The KPR Group established Balaji Amines in 1988 to produce methyl amines. Later they added Ethyl Amines to their product portfolio. In 1989 they commissioned a manufacturing unit for aliphatic amines in Solapur. They started manufacturing Dimethyl Amines Hydrochloride in 1995 and were the world’s largest producer of this particular product. 

The company has 5 manufacturing facilities – 3 in Maharashtra and 2 in Telangana. Balaji Amines is also into Hotel Business and has 1 hotel in Solapur. Their MTPA installed capacity is around 2,31,000. They have 830+ customers with 111+ team size.

Note: If you want to learn Candlesticks and Chart Trading from Scratch, here’s the best book available on Amazon! Get the book now!

telegram channel

Out of its 30+ products, some of its them include Diethylamine, Dimethyl amino ethanol, Triethylamine, Monoethylamine, and Diethyl amino ethanol. In addition, it offers specialty chemicals such as Gamma-Butyrolactone, Dimethylformamide, Pyrrolidone, Morpholine, and N-Methyl.

Segment Analysis

Balaji Amines revenue from operations for FY23 from segments such as Chemicals contribute 98.88%, up 1% YoY, and remaining revenue from 1.10% from hotels, up 55.78% YoY. They derive revenue from India which accounts for 77.68% and the remaining 22.31% from Outside India in FY23. They have an international presence in 51 countries.

Industry Analysis

Globally, the industry is currently suffering headwinds from import dumping by market heavyweights such as China, which is experiencing economic downturns and poor growth. Despite headwinds, India is the world’s third-largest polymer consumer, fourth-largest producer of agrochemicals, and sixth-largest chemical manufacturer. 

The Indian chemical sector accounts for 3.4% of the worldwide chemicals industry. India’s chemical sector is expected to be valued at US$ 220 billion in 2022, increasing to US$ 300 billion by 2025 and US$ 1 trillion by 2040.

India’s specialty chemicals sector is predicted to rise from US$ 32 billion in 2019 to an estimated US$ 64 billion by 2025, at a compound annual growth rate (CAGR) of 12.4%. India contributes 7% of its GDP by far 6th largest in chemical production in the World and 3rd in Asia. Here we have learnt about the company overview of Balaji Amines using the Fundamental analysis of Balaji Amines.

Also read…

Fundamental Analysis Of Balaji Amines – Financials

Revenue and Net Profit

Balaji Amines reported revenue from operations of Rs. 2,355.40 crore in FY23, up 1.4% from Rs. 2,322.88 crore in FY22. Net profits were down 2.92% from Rs. 417.90 crore in FY22 to Rs. 405.68 crore in FY23. 

Revenues in FY23 stayed flat and net profit fell in FY23 compared to FY22. The manufacturing costs increased compared to the revenue. The flat growth in revenue and fall in net profits was due to lower demand from the industries which impacted its sales volume. Cost Inflation has also contributed to the muted performance of the company according to the chairman’s message.

Particulars/ Financial YearRevenue from Operations (Cr.)Net Profit (Cr.)
2022-23₹2,355.40₹405.68
2021-22₹2,322.88₹417.90
2020-21₹1,311.46₹243.50
2019-20₹935.77₹97.47
2018-19₹943.05₹117.09

Profit Margins

The company’s operating profit margin in FY23 was 26.34% compared to 27.27% in FY22. Net profit margin stood at 17.11% in FY23, down from 17.88% in FY22.

The slight rise in the cost of materials has impacted its margins. However, the company has been able to keep its margins between 26% to 29%. Net profit margin was impacted due to muted growth but in the last 5 years, the company was able to increase its margin from 10.36% in FY20 to the current 17.11%.

Particulars/ Financial YearOPM (%)NPM (%)
2022-2326.34%17.11%
2021-2227.27%17.88%
2020-2128.79%18.48%
2019-2019.75%10.36%
2018-1920.86%12.36%

Return Ratios

The RoE stood at 28.93% in FY23 compared to 38.98% in FY22. RoCE was down 38.97% in FY23 compared to 49.66% in FY22. Over the recent 3 years, the RoE was around 31% to 39% and the RoCE was around 34% to 50%.

RoE was down in FY23 due to a decrease in net profits. This led to negative returns on additional capital or reserves. RoCE followed the same trend as RoE, The returns have been impacted but the returns are at comfortable levels.

Particulars/ Financial YearRoE (%)RoCE (%)
2022-2328.93%38.97%
2021-2238.98%49.66%
2020-2131.37%34.88%
2019-2015.82%17.59%
2018-1922.48%24.56%

Debt Analysis

Balaji’s debt-to-equity ratio stood at 0.06 in FY23 compared to 0.11 in FY22. Interest coverage in FY23 stood at 48.35 times in FY23, up from 34.82 in FY22. The company D/E improved in FY23 and was at lower levels. A decrease in debt helps the company to expand its capex and improve its returns during a high-interest environment.

Interest coverage at a time high in FY23. Despite the muted net profit growth YoY, the ratio improved based on a slight increase in depreciation cost and a reduction in Interest costs. Now we are at the end of financials of the Fundamental analysis of Balaji Amines.

Particulars/ Financial YearD/EInterest Coverage
2022-230.0648.35
2021-220.1134.82
2020-210.2518.86
2019-200.46.69
2018-190.3613.67

Fundamental Analysis Of Balaji Amines – Key Metrics

Let’s look at some of the key metrics of Balaji Amines

ParticularsAmountParticularsAmount
CMP₹2,177.05Market Cap (Cr.)₹7,896.77
Stock P/E (TTM)40EPS (TTM)₹60.93
RoE (%) (TTM)12.27%RoCE (%) (TTM)20.98%
Promoter Holdings (%)53.70%FII Holdings (%)4.58%
Debt to Equity Ratio (TTM)0.03Interest Coverage Ratio48.35
Current Ratio (TTM)10.87Net Profit Margin (%)17.22%

Fundamental Analysis Of Balaji Amines – Future Plans

  • The company recently got a clearance on a 90-acre land in Solapur for a greenfield project which is strategically located to customers and western and southern India.
  • Phase – 2 and 3 involve capex of Rs. 300-350 crore incurred over FY24 and FY25 and are expected to be mostly funded through internal accruals.
  • Balaji Amines is looking to increase its product portfolio by releasing it into the market. n-Butylamine by Q4FY24, Methylamine by Q2FY25 and Dimethyl ether by H1FY25.
  • Capacity Expansion commissioned to produce n-butylamine, Methylamine, and Dimethyl ether within the next 12 months.
  • Plans to install a solar power plant in Solapur.
  • Looking to increase export share from 15% – 17% to 25% – 30% in the upcoming 1 or 2 years.
  • Dimethyl Carbonate can play a major role in entering into the lithium and battery segment.

Read more: SBI Life Insurance Vs HDFC Life Insurance

Conclusion

As we are at the end of the article Fundamental Analysis Of Balaji Amines, we will look at Balaji Amines in brief. Balaji Amines is performing better but because of the sector headwinds, their revenues were impacted. Balaji Amines is reeling under some Corporate Governance Issues such as the Delayed release of Q1FY24 results, and the resignation of Independent Directors projects weak governance in the company. 

The weak results also added problems reflected in its stock price as well. The stock corrected around 50% from its all-time high. What do you think about this company’s potential? Let us know your thoughts in the comments below.

Written by Santhosh

By utilising the stock screenerstock heatmapportfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investments.


Start Your Stock Market Journey Today!

Want to learn Stock Market trading and Investing? Make sure to check out exclusive Stock Market courses by FinGrad, the learning initiative by Trade Brains. You can enroll in FREE courses and webinars available on FinGrad today and get ahead in your trading career. Join now!!