This article we can explore the possibility of Samrat Pharmachem Ltd as a multibagger 2022 Stock based on Value Investing principles.
| Website | https://samratpharmachem.com |
| CMP | Rs. 1156.00 |
About Samrat Pharmachem Ltd
Samrat Pharmachem Limited was incorporated on 16th June, 1992 at Ankleshwar in Gujarat State of India by Mr. Lalit Mehta and Mr. Rajesh Mehta. The Company commenced operations by acquiring factory land in Ankleshwar. The founders of the company Mr. Lalit Mehta and Mr. Rajesh Mehta decided to focus on “IODINE” as the key ingredient for all their products with a vision to become the King in Iodine Chemistry.
Samrat Pharmachem became a public company and listed its shares on the Bombay Stock Exchange in 1995. The Company decided to accelerate their growth by adding new products & acquiring more land besides its existing setup. The Company became a major supplier of Iodine Derivatives to the Indian and Foreign Market.
Through cost effective manufacturing capabilities and loyal customers, the Company also entered new industries like Salt, Animal Feed, Textile & Tyre Cord Manufacturing segment. Today Samrat Pharmachem has evolved into a knowledge driven Company manufacturing pharmaceutical ingredient products. It is R&D focused and has a multi-product portfolio with a state of the art and manufacturing facility in Ankleshwar.
Iodine and bromine salts are now being produced by Samrat Pharmachem Ltd. The company produces completed goods that are used in a variety of industries, including salt, food, fertiliser, pharmaceuticals, and chemicals. The company’s product line consists of Calcium Iodate Monohydrate, Copper Iodide, Hydrogen Peroxide (47%), Hydrogen Peroxide (57%), Iodine, Iodine Monochloride, Iodoethane (Ethyl Iodide), Iodomethane (Methyl Iodide), Potassium Bromide, Potassium Iodate, Potassium Iodide, Potassium Metaperio.
Location
On June 16, 1992, Samrat Pharmachem was established in the Gujarati city of Ankleshwar. Lalit Mehta and Rajesh Mehta promoted it. The business currently produces bromine and iodine salts. The company produces completed goods that are used in a variety of industries, including salt, food, fertiliser, pharmaceuticals, and chemicals. The company’s products are popular both in domestic and international markets. The business is a public limited company, and shares are listed & traded there as well as on other Indian bourses. 30 individuals work for the company’s operations in Mumbai and Ankleshwar at the moment.
Market
A well-integrated pharma company, Samrat Pharmachem exports its finished products across the globe. Their customers include premium multi-national companies with multiple facilities approved by leading regulatory agencies such as USFDA, EU GMP, UK MHRA, South Africa-MCC, Health Canada, WHO and Brazil ANVISA, Samrat Pharmachem makes use of in-house R&D along with a team of technical experts in the field of Iodine to offer widest range of derivatives to its customers.
Currently, the company owns and runs two production facilities in its Ankleshwar, Gujarat, facility. Leading regulatory organisations like the USFDA, EU GMP, UK MHRA, South Africa-MCC, Health Canada, etc. have given their approval for its facility.
It sends its goods to places including the US, Europe, Africa, Asia, and the Middle East, among others. In FY21, exports made up about 8% of total revenue, up from 5% in FY20.
Capacity
The company’s production facility and testing facility are both located in Ankleshwar. The factory spans 3645 square metres and has a 20000 square foot developed space. Their key advantage is technological innovation. They work hard to make whatever is conceivable chemically a reality. Research and development has several facets, with a focus on the development of both products and processes. Their dedication to maintaining a lovely and pure environment motivates them to continuously develop their process-related techniques.
The business has a cutting-edge, well-equipped quality control laboratory staffed by qualified experts who have established rigorous standards for testing and approval. The quality of the products is regularly checked, starting with the raw ingredients and continuing through the intermediate and final stages. The company’s lab and goods have received approval from Gandhinagar, Gujarat’s Food & Drug Administration.
Samrat is well-equipped to carry out its duties throughout the year without a breakdown in challenging circumstances. The business has a centrally placed, fully automated office in Mumbai. Smooth and faultless logistics services are guaranteed by excellent documentation and personal attention to all national and international orders. The company’s team is well-trained to handle any unforeseen circumstances. Packaging that is secure, practical, and tamper-proof guarantees reliability and simple handling. The business will soon receive ISO 9000 & ISO 14000 Certification accreditation.
Threats
The business is moving toward implementing ERP, which will connect all of its online activities and provide quick information and reports. Iodine and bromine salts are one of the industries where Samrat dominates. Numerous international and Indian multinational corporations are among the clientele of the business.
The company is heavily exposed to volatility in raw material prices due to high raw material concentration in COGS and low margins.[2] Its primary raw material is Iodine Crude.[7] Cost of raw material accounted for ~91% of revenues in FY21
The total income for the three months ended in December 2021 remained essentially unchanged at Rs. 555.78 millions. The company’s Net Profit increased 319.45%, from Rs. 15.37 million in the previous quarter to Rs. 64.47 million. A healthy operational profit of 88.36 million dollars was reported by the corporation, up from 25.44 million dollars in the comparable quarter the prior year.
Samrat Pharmachem Ltd., founded in 1992, is a small-cap business in the pharmaceuticals industry with a market worth of Rs 328.40 crore.
Chemicals (Pharmaceutical) is one of Samrat Pharmachem Ltd.’s primary product/revenue segments for the fiscal year ending March 31, 2022.
For the quarter that ended on June 30, 2022, the company reported a Standalone Total Income of Rs. 86.53 crore, up 82.59% from the same quarter last year and up 43.64% from the previous quarter’s Standalone Total Income of Rs. 60.24 crore. In the most recent quarter, the company achieved net profit after tax of Rs. 9.37 billion.
Nishant Kankaria, Megh Mehta, Rajesh Mehta, Renu Dharod, Samir Kothary, Mahendra Pipalia, and Lalit Mehta are among the members of the company’s management. It is listed on the NSE with the NSE Symbol and ISIN of on the BSE with the BSE Code of 530125. The company’s registered office is located at Plot No. A2/3445, G I D C Phase 4, Opposite P C I Ankleshwar, Gujarat, 393002. K FIN Technologies Ltd. is one of their Registrars (Karvy Fintech Pvt Ltd.) Shah & Savla, Shah & Savla LLP, Shah, Shah & Shah are its auditors.
Products & Services
- Agro chemical
- Animal Feed
- Chemical
- Cosmetics
- Food
- Pharmaceutical
- Printing
- Textile
Profit & loss
Warren Buffett Checklist
| Factor | Value |
| Economic moat | Moderate |
| Growth | Moderate |
| Valuation | Good |
| Debt | Good |
| Integrity | Good |
Positives
- Company has delivered good profit growth of 58.1% CAGR over last 5 years
- Company has a good return on equity (ROE) track record: 3 Years ROE 30.6%
- The company has an efficient Cash Conversion Cycle of 35.91 days.
- Intrinsic Value Discount at 90% above
Negatives
- Stock is trading at 7.23 times its book value
- Price Volatility of Raw Materials based on Rupee Depreciation
Summary
As per the Expansion & Value Investing grounds the company is having Multibagger Properties.
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