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Khaitan Chemicals & Fertilizers Ltd. Stock Analysis

Small Cap
Evaluated by 227 users | BSE: 507794 | NSE: |
Fertilizers
Khaitan Chemicals & Fertilizers Ltd. (KCFL) began its operation in 1987 at Nimrani near Indore, West Madhya Pradesh and has earned cash profits each and every year, since its inception, even though SSP Industry has gone through tumultuous times. Today KCFL has earned the distinction of...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 20.58%15.59%5.87%6.11%6.94%6.36%6.63%6.08%7.76%10.26%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 458644458388329392359353373437
Y-o-Y Gr. Rt.-40.7%-28.9%-15.3%-15.2%19.2%-8.6%-1.5%5.5%17.3%
Adjusted EPS (Rs.) 3.422.970.550.660.290.180.240.290.831.67
Y-o-Y Gr. Rt.--13.2%-81.5%20%-56.1%-37.9%33.3%20.8%186.2%101.2%
Book Value per Share (Rs.) 10.9812.9513.1112.8813.0113.1213.3113.4414.2415.78
Adjusted Net Profit 33.228.85.36.42.81.82.32.8816.2
Net Op. Cash Flow (Rs. Cr.) -21-5.3-43.817521.125.631.764.192.516.1
Debt to Cash Flow from Ops -7.23-41.84-7.271.2210.79.037.563.151.488.64
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Khaitan Chemicals & Fertilizers Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales -0.5%5.8%6.8%17.3%
Adjusted EPS -7.7%41.9%90.9%101.2%
Book Value per Share 4.13.95.810.8
Share Price 0.6% 17.7% 11.3% 169.3%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 35.9524.834.25.072.231.391.792.175.9711.13
Operating Profit Margin (%) 15.5410.977.799.2410.5110.2410.9110.711.5710.94
Net Profit Margin (%) 7.254.471.161.650.850.450.640.82.153.71
Debt to Equity 1.421.762.51.71.791.821.851.550.990.91
Working Capital Days 148158274281280246291297248215
Cash Conversion Cycle 956312316916812814214110887
Entity Percentage Holding
Promoters 74.99%
Institutions 0.01%
Non-Institutions 25.00%
Pledged *54.9954.9954.9954.9954.9954.9954.9954.9954.9954.99
* Pledged shares as % of Promoter's holding (%)
Data is not available for this company.

The 5-year analysis of Khaitan Chem & Fert.'s performance infers:

Khaitan Chem & Fert. earnings have grown by 41.9%, whereas share price has appreciated 17.7% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Khaitan Chem & Fert. share prices over the last 10 years. Here is what we found out:

Khaitan Chem & Fert. share price has appreciated 0.2% annually over the past ten years.

Khaitan Chemicals & Fertilizers Ltd. (KCFL) began its operation in 1987 at Nimrani near Indore, West Madhya Pradesh and has earned cash profits each and every year, since its inception, even though SSP Industry has gone through tumultuous times. Today KCFL has earned the distinction of being the largest manufacturer of SSP in India. The company is producing top quality fertilizer, sold under the brand name of 'Khaitan Khad', and is the brand leader in Western Madhya Pradesh.

The

Khaitan Chemicals & Fertilizers Ltd. (KCFL) began its operation in 1987 at Nimrani near Indore, West Madhya Pradesh and has earned cash profits each and every year, since its inception, even though SSP Industry has gone through tumultuous times. Today KCFL has earned the distinction of being the largest manufacturer of SSP in India. The company is producing top quality fertilizer, sold under the brand name of 'Khaitan Khad', and is the brand leader in Western Madhya Pradesh.

The Khaitan Chemicals & Fertilizers ( KCFL Group) was formulated in 1995 under the leadership of Shailesh Khaitan. The group at that time consisted of:

  • Khaitan Chemicals & Fertilizers Ltd.: 66000 TPA SSP and 33000 TPA Sulphuric Acid.
  • Khaitan Agro: 300 TPD Solvent Extraction Plant.
  • Khaitan Paper and Packaging (P) Ltd.: Corrugated Boxes
  • Hind Polyfabs Pvt. Ltd.: Plastic Woven Sacks.

However since 1995, KCFL has seen a dynamic growth and expansion under the new leadership. It is today the largest manufacturer of SSP in India. The group has today an installed capacity of 847500 TPA of Single Super Phosphate & 221,100 TPA of Sulphuric Acid and 3325 KW of captive power generation and 1400 TPA Solvent Extraction Plant, 100 TPA Refinery. .During the year 1998-1999 the Agro Division of Radico Khaitan Ltd. was transferred to Khaitan Soya Ltd., which has since been amalgamated with Khaitan Chemicals & Fertilizers Limited, w.e.f. 01.04.2001.

During the year 2000-2001 the Shriniwas Fertilizers Limited a sick unit was taken over by the management of Khaitan Chemicals & Fertilizers Limited,and was amalgamated with Khaitan Chemicals & Fertilizers Limited, w.e.f. 01.04.2001.

During 2004 New SSP Plant at Nimbahera (Rajasthan) commenced production.

In 2005-06 a 1000 TPD capacity for Soya Bean Processing at existing location at Ratlam, was commissioned. In the same year KCFL also acquired Mahadeo Fertilizer Ltd.at Fatehpur,near Kanpur,U.P. and amalgamated with itself in May 2006 w.e.f. 1.04.05..

KCFL further acquired in 2006 in its sister company a 800 TPD plant of Solvent Extraction adding the following products : -Solvent Extraction 2,40,000 TPA -Refund Oil  18,000 TPA -Other value added products like lecithin,Soya Flour, Soya Nuggets, Vanaspathi etc.

The company has also installed a 1250 KW Wind Turbine Generator, in Dhulia, Maharashtra. The wind mill was commissioned in September 2006.

Product range of the company includes:

  • Single Super Phosphate- W/S P2O5 16% Single Super Phosphate is one of the cheapest sources of direct application phosphatic fertilizer with a high sulfur content of 12% which makes it exceptionally suitable for oilseed crops besides other crops.The company is also manufacturing GSSP (Granulated SSP) suitable for use in mechanized farming.
  • Sulphuric Acid- The company is not only manufacturing high grade Sulphuric Acid for its captive consumption but is also selling in the market. There is a high demand for Sulphuric Acid in there adjoining areas.
  • Oleum 23%/65% and Liquid So3- These are derivatives of Sulphuric Acid and are used as intermediate products for manufacture of dyes & chemicals. Also used as sulphating and sulphonating agent, as a dehydrating agent in nitration, petroleum refining, laboratory reagent etc. The products are of very high quality and in demand by the consumer industries.
  • Soya Oil- Soya Oil is extracted from soyabean, which is the most widely used oilseed worldwide.Soya Oil has a high capacity of polyunsaturated fatty acids.
  • Refined Vegetable Oil- The crude oil received from the Solvent Extraction Plant is passed through a number of processes under strict hygienic conditions and quality control. The refined oil is marketed under the brand of 'Khaitan Vegetable Oil'. The Soya oil is considered to be amongst the best in the edible oils, since it has low, almost negligible levels of saturated fats which lead to cholesterol deposits in the blood vessels. The Soya Oil also has a high content of Vitamin E, favourable for a healthy skin.
  • Soyabean Meal- Soyabean Meal (De-oiled Cake) is another product in the manufacture of Soya Oil and has its main application in the formulation of cattle feed. Because of its high protein content of 48% by weight as compared to 40% to 42% in products supplied by USA and Brazil, Indian soya meal is preferred over other countries.
  • Power- KCFL has commissioned captive power plant of 2800 KW Power Plant at Nimrani and 525 KW at Jhansi operating on steam, which is a byproduct of Sulphuric Acid plant. The company has  further installed and commissioned in Dhulia, Maharashtra in 2006, a Wind turbine Generator with a capacity of 1250 KW, for generation of electricity by harnessing the winds.

Different divisions of the company:

Fertilizer Division-  It has units at four locations:

(1) Nimrani- Since, 1995 the capacity has expanded more than 6 times to 4,00,000 TPA of SSP and 1,15,500 TPA of Sulphuric Acid, 2800 KW Power. Besides, the Nimrani plant has value added products like Oleum 65%, Oleum 23% and Liquid So3.

(2) Jhansi- As a part of an overall strategy to utilize the core competence developed by the group in the field of SSP and Sulphuric Acid and diversify its manufacturing and marketing bases, the group had acquired strategic stake in Shriniwas Fertilizers Ltd. located at Jhansi (U.P.) and subsequently merged it with the company. The capacity at the time of acquisition was 66000 TPA SSP and 33000 TPA Sulphuric Acid, which has since been increased to 132000 TPA SSP and 56100 Sulphuric Acid, 525 KW Power.

(3) Nimbahera - New plant to produce 2,00,000 M.T. SSP has been put up in Rajasthan. Production commenced from July 2004.

(4) Fatehpur, near Kanpur-KCFL has recently taken over Mahadeo Fertilizers Ltd .fatehpur, near Kanpur, U.P. a BIFR unit having 115,500 TPA capacity of SSP and 49,500 TPA capacity of Sulphuric Acid .The company has now also been merged with KCFL w.e.f. 1.04.05.

Soya Division - Soya Seed Processing: Capacity expanded from 300 TPD TO 1400 TPD for solvent oil extraction. Expansion at Rat Lam: Plant for 1000 TDP Soyseed processing has been put up and commissioned last year.This has increased the soyseed processing capacity to 1400 TPD. Refinery: KA while looking at the good response to the quality of its crude oil decided to go directly to the consumer and has launched 'Khaitan Vegetable Oil' i.e. refined Soya Oil manufactured in the new 100 TPD Refinery commissioned in June, 2000.

New Acquisition in Madhya Pradesh: KCFL has futher acquired in 2006 in its sister company a 800 TPD plant of Solvent Extraction adding the following products.Value added products like Lecithin, Soya Flour, Soya Nuggets, Vanaspathi etc.

Power Division- The company already has two captive power generating units in its existing Fertilizer Division. These units of total capacity of 3325 KW generate power using the waste heat generated during the acid manufacturing process. The company has now also put up a 1250 KW, WTG (Wind Turbine Generator) in Dhulia, Maharashtra for generation of power to be sold to the Maharashtra Government.

Achievements/ recognition:

  • The company is today the largest manufacturer of SSP in India.
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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