Clariant India: Ready for a take off? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Clariant India: Ready for a take off?

May 30, 2000

Over the past few days the old economy stocks have begun to stage a comeback ostensibly on the ground that there is a recovery happening out there. This logically should lead to a cascading effect on industries that provide inputs to the major sectors. One such industry is the specialty chemicals industry that provides inputs to the leather, textiles, paper, paints, rubber, automotives, cosmetics and metal mining industries. One of the biggest players in this industry is Clariant (India), the Indian subsidiary of the Swiss chemical giant, Clariant International. The Indian company is a leading manufacturer of textile chemicals and dyes (which contribute around 40% to the company’s turnover) leather dyes (which contribute around 24% of the company’s turnover) and exports to its international affiliates which contribute around 32% to the company’s turnover.

The international consolidation favours Clariant

The high percentage of exports can be partially explained by the fact that the international consolidation in the industry has led to Clariant International emerging as the biggest specialty chemical manufacturer. The company, which was spun of from Sandoz when the latter merged with Ciba to form Novartis also acquired Dystar (which was formed through the merger of specialty chemicals business of Hoechst and Bayer). In India the company is slated to acquire Dystar’s affiliate Colour Chemicals by the next year.

The company can be expected to report a net profit of Rs 160 m (EPS: 13.41) on a turnover in excess of Rs 2.5 bn for the current year FY 2000 which implies an earning multiple of around 10 times at the current price of Rs 139. This is much lower than the lowest price–earning multiple at of 19.4 at which the stock quoted in 1998. The stock in fact is quoting around its three year low (of Rs 133 touched in April 1997) and for the biggest specialty chemical company with 32% of its turnover accruing from exports and a zero debt status, an impending economic recovery could spell good times.

Equitymaster requests your view! Post a comment on "Clariant India: Ready for a take off?". Click here!

  

More Views on News

Ami Organics Stock Makes Impressive Debut on Bourses. Lists at 49% Premium (Views On News)

Sep 14, 2021

Shares of Ami Organics makes a strong debut on the stock exchange. Did you bid for the IPO?

Chemplast Sanmar Makes Flat Debut as IPO Frenzy Fizzles Out (Views On News)

Aug 24, 2021

The grey market had indicated a flat listing for shares of Chemplast Sanmar ahead of its debut.

Understanding Aarti Industries' Demerger (Views On News)

Aug 20, 2021

Will the pharma unit's demerger unlock value for shareholders?

What Next for Devyani, Zomato, & Tatva Chintan Pharma After Stellar IPO Gains? (Views On News)

Aug 20, 2021

What's the outlook for Devyani, Zomato, and Tatva Chintan Pharma after robust listings?

Pidilite Results Review: Net Profit Spikes as Sales Rise 121% (Views On News)

Aug 12, 2021

Pidilite posts strong sales growth and a multi-fold jump in bottomline.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

6 Penny Stocks that Rallied 1,000%+ in One Year (Views On News)

Dec 6, 2021

These penny stocks shed their penny status by surging 1,000% or more in the last one year.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

TRACK CLARIANT (I)

  • Track your investment in CLARIANT (I) with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MARKET STATS