October 29, 2012

Gujarat Alkalies and Chemicals

Background:
GACL was promoted in March 1973 by the Government of Gujarat (GoG) through its industrial investment arm, Gujarat Industrial Investment Corporation Ltd. (GIIC). It is the largest player in the domestic caustic chlorine industry with integrated operations 429,000 metric tonne per annum (MTPA) of caustic soda at its plants in Vadodara and Dahej as at March 31, 2012 (making it the market leader in the caustic soda industry). Its major products include caustic soda, liquid and gaseous chlorine, hydrogen peroxide, etc which find application in a wide range of industries, including the manufacturing of textiles, pulp and paper, aluminium, detergents, soaps, rayon, plastics, pharmaceutical and agricultural chemicals, etc. GACL’s manufacturing plants are located at Nandesari in Vadodara and Dahej near Bharuch. The Dahej complex also houses a gas-based captive power plant of 90 MW. In addition, the company installed totaled wind power plant for 21 MW.

Financials
Annual results:
(in Cr.)
2011 - 12
2010 - 11
2009 - 10
2008 - 09
2007 - 08
Income Statement
Revenue
1,710.97
1,435.41
1,315.87
1,420.54
1,133.63
Other Income
11.77
11.28
24.04
9.53
69.75
Total Income
1,722.74
1,446.69
1,339.91
1,430.07
1,203.38
Expenditure
-1,339.84
-1,166.71
-1,054.61
-1,034.75
-803.58
Interest
-20.53
-19.89
-17.48
-24.59
-25.33
PBDT
362.37
260.09
267.82
370.73
374.47
Depreciation
-138.95
-132.97
-121.55
-109.43
-98.96
PBT
223.42
127.12
146.27
261.3
275.51
Tax
-69.81
-12.81
25.57
-69.03
-51.43
Net Profit
153.61
114.31
171.84
192.27
224.08
Equity
73.44
73.44
73.44
73.44
73.44
Reserves
1,534.35
1,406.33
1,317.64
1,171.49
1,004.99
EPS
20.92
15.56
23.4
26.18
30.51
CEPS
39.84
33.67
39.95
41.08
43.99
OPM %
22.38
19.51
21.68
27.83
35.27
NPM %
8.98
7.96
13.06
13.53
19.77
 
 
 
Quarterly:
(in Cr.)
30-Jun
31-Mar
31-Dec
30-Sep
30-Jun
Mar-12 (Annual)
Income Statement
Revenue
441.05
427.4
443.38
420.35
420.64
1,710.97
Other Income
0.94
1.66
0.95
8.04
0.32
11.77
Total Income
441.99
429.06
444.33
428.39
420.96
1,722.74
Expenditure
-323.4
-319.13
-367.35
-336.93
-318.09
-1,339.84
Interest
-2.96
-4.03
-4.91
-4.51
-5.53
-20.53
PBDT
115.63
105.9
72.07
86.95
97.34
362.37
Depreciation
-34.61
-34.7
-35.91
-35.23
-33
-138.95
PBT
81.02
71.2
36.16
51.72
64.34
223.42
Tax
-25.75
-26.99
-10.22
-14.66
-17.94
-69.81
Net Profit
55.27
44.21
25.94
37.06
46.4
153.61
Equity
73.44
73.44
73.44
73.44
73.44
73.44
EPS
7.53
6.02
3.53
5.05
6.32
20.92
CEPS
12.24
10.74
8.42
9.84
10.81
39.84
OPM %
26.89
25.72
17.36
21.76
24.46
22.38
NPM %
12.53
10.34
5.85
8.82
11.03
8.98
 
Balance Sheet
Balance Sheet
Mar '12
Mar '11
Mar '10
Mar '09
Mar '08
http://img1.moneycontrol.com/images/blank.gif
 
12 mths
12 mths
12 mths
12 mths
12 mths
http://img1.moneycontrol.com/images/blank.gif
Sources Of Funds
 
 
 
 
Total Share Capital
73.44
73.44
73.44
73.44
73.44
Equity Share Capital
73.44
73.44
73.44
73.44
73.44
Share Application Money
0
0
0
0
0
Preference Share Capital
0
0
0
0
0
Reserves
1,534.35
1,406.34
1,317.64
1,171.49
1,004.99
Revaluation Reserves
0
0
0
0
0
Networth
1,607.79
1,479.78
1,391.08
1,244.93
1,078.43
Secured Loans
241.43
217.14
237.98
254.34
164.95
Unsecured Loans
70.01
165.13
85.26
80.89
150.52
Total Debt
311.44
382.27
323.24
335.23
315.47
Total Liabilities
1,919.23
1,862.05
1,714.32
1,580.16
1,393.90
 
Mar '12
Mar '11
Mar '10
Mar '09
Mar '08
http://img1.moneycontrol.com/images/blank.gifhttp://img1.moneycontrol.com/images/blank.gif
Application Of Funds
 
 
 
 
Gross Block
3,161.25
2,769.24
2,686.47
2,480.91
2,217.72
Less: Accum. Depreciation
1,561.77
1,412.60
1,271.00
1,095.18
996.68
Net Block
1,599.48
1,356.64
1,415.47
1,385.73
1,221.04
Capital Work in Progress
43.26
293.46
176.05
101.29
42.76
Investments
161.08
156.2
140.51
117.28
120.51
Inventories
178.93
147.96
140.25
170.57
104.72
Sundry Debtors
250.44
279.85
263.55
248.1
193.91
Cash and Bank Balance
57.89
17.26
12.61
22.97
54.48
Total Current Assets
487.26
445.07
416.41
441.64
353.11
Loans and Advances
534.45
389.48
382.47
329.15
285.44
Fixed Deposits
0
0
0
0
0
Total CA, Loans & Advances
1,021.71
834.55
798.88
770.79
638.55
Deffered Credit
0
0
0
0
0
Current Liabilities
506.62
499.78
577.14
534.97
404.38
Provisions
399.7
279.02
256.9
296.85
263.94
Total CL & Provisions
906.32
778.8
834.04
831.82
668.32
Net Current Assets
115.39
55.75
-35.16
-61.03
-29.77
Miscellaneous Expenses
0
0
17.44
36.89
39.35
Total Assets
1,919.21
1,862.05
1,714.31
1,580.16
1,393.89
http://img1.moneycontrol.com/images/blank.gif
Contingent Liabilities
422
311.49
368.02
319.1
163.05
Book Value (Rs)
218.93
201.5
189.43
169.52
146.85
 
Investment rationale:
1.    The debt of the company has been reducing consistently over the period of years.
2.    Strong promoter holding: Promoters shareholding in the company is more than 36.72%
3.    Book value of the shares is Rs 226.57 ie 58% less than the current market price.
4.    Largest installed capacity of 429,000 MTPA highest in the industry and the company is working at 100% capacity compared to industry average of 70%
5.    The total operating income of GACL increased by 19% in FY12 on account of higher prices, which was offset by decline in sales volumes by 12% for its major products.
6.    Recent levy of anti-dumping duty on imports from Korea and other nations will help increase or at least stabilization of prices.

The stock is listed both at BSE:530001 NSE: GUJALKALI. The closing price of the stock was  Rs 132.1
Dividend: 30%


Add this stock on declines or buy immediately if moves past Rs. 140

Disclaimer: Author and his immediate family owns 200 shares of the company @ 131.5 since October 2012.