9X Multibagger Stocks as Value Pick · Bhageria Dye Chem · Jan16



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Bhageria Dye-Chem Ltd.

Value Pick : Summary

About Business :

Bhageria Dye Chem manufactures dyes and dye intermediates and trades agro chemicals, pigments and various pharmaceutical ingredients. The company has its factory in Vapi (Gujarat). Bhageria Dye Chem generates around 80 per cent of its revenue from manufacture of dye and dye intermediates, and the remaining 20 per cent from trading activities.

Domestically, the products are sold in Gujarat and Maharashtra. The day-to-day operations are managed by Mr. Suresh Bhageria and Mr. Vinod Bhageria & currently it is smartly operated with only 19 employees on permanent payroll.

SWOT Analysis :

Strengths

  • Promoter's ie, Bhageria(s) extensive industry experience in the chemical industry.
  • Very efficient manufacturing processes coupled with tight control on its operational efficiency. Bhageria Dye Chem is able to manufacture 300 Cr+ worth of Dyes with a workforce of just 19 Employees.
  • Diversified in Bulk chemicals & Specialty chemicals ie, Intermediaries for Dye Manufacturing.
  • Localized clientele in Maharashtra & Gujarat.
  • Increasing exports hence the quality control of manufacturing is visible.

weaknesses

  • Promoter traded in 1 lot of Nifty options & 1 lot HDFC Bank future with companies fund, Which brings the question why sattebaaji ? Apne business main dhyaan 100% kyon nai hai inka ?
  • No specialty when comes to bulk Dye chemicals & intense competition.
  • Rs 2.8 Crore (approx.) Salaries & bonuses for 2 promoters which is very high for the given size of net profit Bhageria Dye chem makes. Yeh promoter khud hi itni salary lenge to investor ko kya dividend main denge ?
  • Volatile demand of Chemicals specially H. Acid resulting cyclical turnover for the business.

opportunities

  • Capture business from global increasing demand of Bulk Chemicals & Specialty Dye chemicals.
  • Create specialty chemicals by unique processes & patents giving higher profit margins & moat.
  • Expansion in Processed Food & Power Generation business to diversify & increase turnover for the business which are the recent decisions taken by the promoters subject to the shareholders approval.

threats

  • The technology for producing bulk Dye chem can be easily available & there are multiple way to manufacture it.
  • Dye Special chem for intermediaries are unique & are process is closely guarded but can be duplicated or stolen.
  • Environmental hazards with chemicals & Worker safety is always a major concern for the business.
  • Capacity utilization of factory is fluctuated because of the demand supply of Dye Chemicals from the industry hence the cost control is a tricky & requires experience to be managed.

Business Verdict :

Bhageria Dye-Chem had a sudden spurt of turnover back in 2012-13 backed on H.Acid demand and it continued to grow afterwards. With small debt proportion & healthy cash amounts lying spare with the company Bhageria Dye Chem is a Value Pick with possible growth potential into something quite huge.

Dye Chemicals are essential part of our daily life. Bina colors ke to life bekaar hai & hence dyes comes into play. Thanks to Stock brokers who hasn't found it for recommending for sattebaaji yet . I see minor decline in turnovers & healthy profit margins maintained. Bhageria Dye Chem is a Multibagger stock in India available deeply undervalued. ValueGuyz Bhageria Dye chem is a definite value pick to consider.

Note : Waiting for some clarifications regarding future business from Mr. Bhageria. Would update this Value pick if I find some rational info that helps in better decision making while investing.


Official Website

Quality Analysis
Value Matrix

What are Value Picks ?

Value picks are stocks of companies that are believed to be undervalued at NSE or BSE. It is an outcome of huge sattebaaji directed by Stock brokers in that stock making Markets overreact to good and bad news, resulting in stock price movements that do not correspond with the company's long-term business or fundamentals.

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Is Value Pick Tax Free ?

YES, Profit arising from holding Equity shares for 1 Year or more is covered under Long Term Capital Gain ( LTCG) as per Income Tax Act 1961 ( Section 54 )

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regards,

jasmeet singh

Founder & Investor

SEBI Regd.(INH100004951)

Jasmeet Singh

About me :

Currently managing assets of 5 Crore+ & still sleep like a baby every night because Valueguyz makes life simpler.

I am passionate about 3 things in my life Financial System, Fitness & Photography

I got introduced to Financial system through Forex Trading back in 2007 during my 3rd Year of Engineering & It was too complex yet magnificent. Officially I entered Indian Stock Market in early 2008 at the very beginning of Global Financial Crisis, but what the hell did I know for me it was the last semester & time to get serious about my passion ie, Counter Strike

Legends :

RoCE : Return on Capital Employed (Effective)

PAT(Avg.) : Net Profit after tax ( Average )

CMP : Current Market Price

MoS : Margin of Safety

DISCLAIMER

I am currently a registered Research Analyst with SEBI (INH100004951). My writings n research here at www.valueguyz.com are in accordance with SECURITIES AND EXCHANGE BOARD OF INDIA (RESEARCH ANALYSTS) REGULATIONS, 2014.