Dec 20, 2001|
Clariant: Focus pays off
Clariant (India) Limited, (CIL), is a 51% subsidiary of the Swiss multinational Clariant AG. The company manufactures, develops and markets dyes, pigments, additives, masterbatches and specialty chemicals for textiles, leather, paper, plastics, paints and inks. The company has six major divisions-process and performance, pigments & additives, masterbatches, surfactants, fine chemicals and cellulose. Clariant (India) is one of the three global sourcing centers for Clariant Worldwide.
|Operating Profit (EBDIT)
|Operating Profit Margin (%)
|Profit before Tax
|Profit after Tax/(Loss)
|Net profit margin (%)
|No. of Shares (eoy) (m)
|Diluted Earnings per share*
|P/E (at current price)
A sales growth of more than 10% in 1HFY02 inspite of strong international competition was remarkable. This growth was the result of the company's focus and fast introduction of new products. The ratio of new products to sales has jumped to almost 20% currently, from less than 14% couple of years back. Infact, CIL has launched more than 100 new products in FY01 alone. This resulted in a 130 basis points rise in operating margins during the year.
Exports contribute around 30% to the company's revenues with textile dyes accounting for majority of export revenues. However, the export market is extremely competitive with price pressures especially from China. However, in future, the company's exports could show a decent growth as it forms part of three main sourcing bases for its parent apart from China and Japan. To sustain growth rate and maintain its strong presence in this industry, CIL would focus on the textile chemicals, leather and masterbatches businesses. Masterbatches is one of the fastest and most rewarding businesses for the company. With new manufacturing facility for masterbatches coming in place, operating margins could witness a slight improvement in the current year.
Reflecting this strong performance the stock price has moved up by more than 40% in last five months. At the current market price of Rs 107, the stock trades at a P/e of 6x its annualised 1HFY02 earnings. The company seems to be fighting against all odds strongly, the outlook for the speciality chemicals industry does not seem encouraging in the near term. Majority of the speciality chemicals is consumed by the pharma industry. Minus the pharma industry demand, the speciality chemical industry continues to face poor demand growth. Overall growth in the segment is expected to be around 4%-5%. Though Clariant India remains the leader in the industry and is expected to outperform the industry, the growth rates are expected to be unglamorous. The exports market are also expected to remain sluggish with substantial capacity built up in China and lack of demand from European markets.
More Views on News
Aug 17, 2017
Interruption at Haldia plant and fire at Lostock facility hits operations during the quarter.
More Views on News
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 10, 2017
Bitcoin hits an all-time high, is there more upside left?
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407