Balaji Amines – Trading Calls

Balaji Amines (Rs. 171.00) (Code : 530999) has recently decided to go for a stock split and is looking to take shareholders approval in the AGM. Meanwhile it has ended FY10 on quite a buoyant note as PAT improved by 35% to Rs 20.65 cr although sales remain flat at Rs 262 cr. It posted an EPS of Rs 32 on equity of tiny Rs 6.50 cr. Company is among the few handful manufacturers across the world producing methylamines, ethylamines and their derivatives, as amine manufacturing technology is a closely guarded process. Ironically company is using indigenously developed technology. Recently it commissioned Gamma Butyro Lactone (GBL) plant with a capacity of 18 MT /day which is first of its kind in India and is again a 100% import substitute. Earlier it commenced production of PVP K-30 which is an import substitute, at its new plant having installed capacity of 1200 MT. Because of the backward integration and introduction of niche products, company has been able to boost its operating margin considerably. In near future company is looking to set up a three-star hotel at its surplus land in Solapur, Maharashtra with an investment of Rs 30 cr. For FY11 it is expected to register sales of more than Rs 300 cr and PAT of Rs 25 cr i.e. EPS of Rs 38 on equity of Rs 6.50 cr. Scrip can easily appreciate 30% within a year. Keep accumulating at dips.

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