In this article, we can explore the possibility of Valiant Organics Ltd as a Multibagger 2021 Stock based on Value Investing principles. Valiant Organics Limited is a chemical production company where its primary objective is to manufacturing and marketing speciality chemicals
| Website | http://www.valiantorganics.com/ |
| CMP | Rs. 1210.00 |
About Valiant Organics Ltd Multibagger
Valiant Organics Ltd produces products that are used in different applications such as agrochemical, pharmaceutical, rubber, dyes, pigment and in the manufacturing of veterinary drugs.
Their integrated manufacturing facilities located at Sarigam, Tarapur, Vapi, Jhagadia, and Ahmedabad can manufacture diversified products which offer maximum utilization of its capacity.
Valiant Organics Ltd was originally founded in 1984 as a partnership under the name of Valiant Chemical Corporation. Then it was later incorporated as a private limited company in 2005 with the aim of conquering this partnership firm. After that in 2015, the Company was further converted into a public limited company.
Moulded by decades of manufacturing experience, Valiant Organics Ltd can manufacture products that fulfil the specific requirements of their customers. As of now they export to Asia, Europe, and the USA, and plans to expand into more international destinations to supply the products.
Manufacturing Units
Valiant Organics has 5 manufacturing units, mostly located in close reach to the large ports of western India. Their Head Office is located in the business capital of India, Mumbai.
- Ports: Kandla, Nhava Sheva, Hazira, Dahej
- Sites: Tarapur, Sarigam, Vapi, Jhagadia, Ahmedabad
- Head Office: Mumbai
About Product Brands
Their lineup of products are
- Agro-Chemicals
- Dyes
- Pigments
- Pharmaceuticals
- Cosmetics
- Speciality Chemicals
- Polymer
- Veterinary
Warren Buffet, Value & Growth Checklist
| Capitalization | ₹ 3,351 Cr |  |
| Sales Increasing past 3 Year | Yes, 99.59 |  |
| Profit Increasing past 3 Year | Yes, 122.59 | |
| Durable Competitive Advantage | Yes | |
| PE Ratio | 27.44 | |
| PB Ratio | 8.71 | |
| Debt Equity Ratio | 0.28% | |
| Intrinsic Value Discount | 179.07 | |
| Promoter Holding & Increase | 42.84% no change | |
| Multibagger Returns | 300-500% 5 Year | |
Business and Industry Analysis
Increase in product basket– They Started out as a single product manufacturing company in 1984, but today Valiant has proven itself as a leading producer of Chlorination, Ammonolysis, Acetylation, Hydrogenation, and Methoxylation based speciality products in India. The company manufactures a wide range of products used as intermediates in several end-user industries, and also in some value-added products.
Domestic focus – The company receives 85% of its revenue from India and 15% from exports.
Continuous expansion and backward integration – The company is in a high capital requirement for capacity enhancement, new product launches, and backward integration. Valiant Organics has increased its Chlorophenol capacity to 18,000 MT per annum by completing the expansion at the Sarigam plant in the financial year of 2020. They also increased the capacities of hydrogenation products from 18,000 MT to 26,000 MT per annum. It further plans on increasing the Ammonolysis capacity at Tarapur and Vapi plants from ~13,000 MT per annum to 16,000 MT per annum. Valiant Organics has an integrated manufacturing facility, which helps it manage all its core activities within the company itself, with no serious dependence on external manufacturing.
Expansion of Product lineup – Valiant Organics is expecting to begin their operations of Para Amino Phenol (PAP) in the second half of the financial year 2020-21, which has been recogonized to be incentivized under the recently announced PLI Scheme by the Indian government. It also added Ortho Nitro Anisole and Para Nitro Anisole to its lineup of products.
Acquisition of Amarjyot Chemical – Valiant Organics made a tactical acquisition of Amarjyot Chemical in March 2019. The acquisition not only expanded its production capacity but also enhanced its product lineup with a range of value-added products.
Positives
- Valiant Organics manufactures and markets Chlorophenols. Domestic sales are 56% while exports are at 44%
- The demand for this product far exceeds supply. This is why the company is expanding capacity from 4800 MT to 21600 MT in a phased manner over a 3 year period.
- Valiant would likely be the future market leader in India with its enlarged production is fully integrated with no dependence on outside factors. Raw materials like Chlorine gas and phenol are readily available.
- The company has the ability to customize its products. It’s charged a premium.
- The expansion strategy is to set up a sales and marketing team and to expand into new territories.
- Promoters increasing shareholding
Negatives
- Competition is from Chinese companies.
- Very low volumes, restriction on purchase quantity.
SUMMARY
As per the R&D, this company is having Multibagger Potentials. However, this is not a Multibagger Recommendation. You should get paid Subscription to get the Real 500% Multibaggers. 3 Multibaggers immediately after payment.
