NIKHIL ADHESIVES
Background
-Manufacturing various types of polymer emulsions that are used for different applications.
-In this business for over 28 years and has three manufacturing units located at Dahanu (Maharashtra), Silvassa(Gujarat) and at Dahej(Gujarat).
-The current production capacity is 60000T p.a. which can be enhanced.
-Acquired the emulsion business of Mafatlal Dyes & Chemicals Ltd. in 2003 and its products are sold under the brand name Mahacol,Emditex, Emdilith, Emdicryl
Positives/Strengths
-Strengthened Brand Image resulting in sales growth of 26%
-Addition of capacity at Dahej plant lead Production capacity increase by 13%
-Backward integration by manufacturing Plasticizers important ingredient of emulsions
-Dividend payout is at 32.5% which is very satisfactory.
Negatives/Risks
- Fluctuating Foreign Exchange lead to loss due to import of raw material
-Slow pace of growth in Construction Sector
-Increase in the cost of Vinyl acetate monomer important raw material for manufacturing emulsions.
Conclusion
Highly recommended at current market price of 33.5
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