Market price at the time of suggestion -: 1647Rs
Transpek Industries is almost 55 years old company engaged in the business of manufacturing and export of a range of chemicals servicing the requirements of customers from a diverse range of industries – Textiles, Pharmaceuticals, Agrochemicals, Advanced Polymers, etc. with its headquarters in Vadodra Gujarat.
Established in 1965 today Transpek Industry Limited is a synonymous to Creative Chemistry. Originally it was Established with the manufacture of acrylic plastic sheets at its plant at Atladra (Vadodra district), Gujarat. In 1969, it discontinued manufacturing acrylic sheets and started manufacturing chemicals.
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TIL started off with products like sodium hexameta phosphate, sodium tripoly phosphate, phosphoric acid, etc.Later on it expanded to manufacture sodium hydrosulphite (hydro), sodium formaldehyde sulphoxylate (safolite), thionyl chloride and sulphur dioxide, most of these being manufactured for the first time in India. It was only in 1987 TIL entered the global scenario and today it is a government-recognised Export House.
The company has grown in leaps and bounds, diversified and emerged as one of the most responsible producers and exporter of chemicals. Over three decades of presence in the international market, Transpek has earned for itself a name for being a quality manufacturer and supplier of chemicals. With its expertise in handling Chlorine and Sulphur, Transpek has indigenously developed process for chlorinated chemicals like Thionyl Chloride and various Acid and Alkyl Chlorides.
Currently company carries out reactions like Chlorination (Inorganic Chemicals), Acid Chlorination with Thionyl Chloride (Acid Chlorides & Fatty Acid Chlorides), Alcohol Chlorination with Thionyl Chloride (Alkyl Chlorides), Friedel-Crafts Reactions, Sulfonation and Amidation.
Transpek is accredited with ISO 9001:2015, ISO 14001:2015, BS OHSAS 18001:2007 for Management System and ISO 50001:2011 for Energy Management System by TUV India Private Ltd. Company is also signatories to Global Responsible Care Initiative and several measures of this initiative are under implementation at our company.
In terms of usage by application company caters to the following Sectors
- Speciality Chemicals
The company caters to various industries, such as polymers, agrochemicals, plastics, performance materials, coatings, pharmaceuticals, personal care, and flavours and fragrances, dyes and pigments.
Polymers and speciality plastics and performance materials is one of the fastest growing sectors globally with continuous innovation and focus to replace metals with strong, high strength and light weight polymers. The global market shall continue to grow for years to come for these types of polymers. The company manufactures multiple products that are supplied to many such global companies manufacturing Polymers and Specialty Plastics. The company has significantly increased its volumes under the long term agreement. The company has achieved the desired capacity and stabilized its operations under the contract. The volumes are likely to remain stable in the near and long term.
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The company has maintained steady supply to pharmaceuticals segment. There is huge growth potential presented by the sector. However due to limitation of production capacities and hindrances in getting additional permission, the company has not been able to fully capture the possible opportunities. Inspite of this, it has remained the number one choice for its customers due to its product quality and strong business relationships over many years.
The company continues to supply limited volumes to the flavours and fragrances segment. The company plans to develop more products and expects growth over the long run
The company has been able to establish its presence as a leading acid chloride manufacturer amongst global chemical giants. The company has successfully delivered the commitments under the long term agreement with its business partner. With such performance, it has been able to enhance its reputation and build confidence amongst its international customers which should help in achieving further growth using similar business model.
Apart from the above company has also Developed in-house ISO Tank station which is well equipped with state of the art technology and manpower. It manages over 600 ISO Tanks for safe and secure transportation of our products. Each tank is closely monitored for its efficient utilization and periodically inspected by its competent authority.
Research and Development
R&D facility has been the backbone of Transpek growth and success. Company has developed a comprehensive in-house R&D facility which is equipped with latest technology and equipment. Every new and existing product undergo a constant research at our lab.It has derived competitive edge in manufacturing of Acid Chlorides and Alkyl Chlorides, which have wide applications. It has developed several products and also started its commercial production and supply. There is constant work on improvement of process efficiency through the use of better catalysts. It has the facility of gram lab, kilo lab and pilot plant to scale up the process.
Company’s R & D facility is recognized by the Department of Science & Technology, Government of India. It also approved by Maharaja Sayajirao University of Vadodara for allowing students pursuing Doctorate of Philosophy (Ph. D) to conduct research and experiments.
Overseas markets, including the US, South Korea, and Europe, contribute 80% to the revenue
Performance in Q1FY21
- Net sales fell 34% to Rs 74.65 crore for quarter ended June’20.
- Operating margins of the company rose 430 bps to 11.9% leading to a 4% rise in operating profit to Rs 8.89 crore.
- Other income fell13% to Rs 4.94 crore.
- Interest cost was down 27% to Rs 2.89 crore.
- PBT was down 1% to Rs 4.18 crore.
- Net profit reported was down 1% to Rs 3.32 crore.
For the Year Ended March 2020
- Net sales fell 5% to Rs 565.64 crore .
- Operating margins of the company rose 120 bps to 20.8% leading to a 1% increase in operating profit to Rs 117.88 crore.
- Other income fell 2% to Rs 17.39 crore.
- Interest cost was down 16% to Rs 15.85 crore.
- PBT fell 8% to Rs 93.52 crore.
- PAT rose 9% to Rs 71.89 crore.
Key Financial Aspects
- Book Value of the company is about 634Rs
- Company trades at a nominal PE of 16 while most of its peers trade at above 40PE multiples
- Despite the markets touching highs , Transpek Industries trades at 25% down from its 52 week high
- Company has Solid ROCE of above 24%.
- Company had solid Operating profit margins over past year of 20%.
- Compounded Profit Growth over 3 and 5 year period was 30%+.
- Debt has reduced significantly over past 2 years.
There are significant opportunities to grow further in acid and alkyl chloride market for various applications in the domestic as well as international market for which the Company has already started taking actions.
Company is looking at the future expansion of the customer base, product profile & regional presence to broad base the potential for growth & minimising reliance/dependence on specific products/customers.
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