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Meghmani Organics Ltd. Stock Analysis

Small Cap
Evaluated by 2053 users | BSE: 532865 | NSE: MEGH |
Pesticides & Agrochemicals
It was in 1986, when Gujarat Industries was established as a partnership firm in Gujarat to manufacture pigments. High productivity and profitability transformed Gujarat Industries to a joint stock company, under the name of Meghmani Organics Limited, by 1995. Since then Meghmani Organics...

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.
Meghmani Organics Ltd. has not performed well majority of the past ten years indicating its past ten year financial track record is not good
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 6.7%3.79%2.5%2.41%6.65%6.43%6.85%8.46%14.12%15.21%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 8658227508939489591,0461,2381,4101,625
Y-o-Y Gr. Rt.--5%-8.8%19.2%6.2%1.2%9.1%18.3%13.9%15.2%
Adjusted EPS (Rs.) 1.630.510.12-0.071.211.311.622.625.086.37
Y-o-Y Gr. Rt.--68.7%-76.5%-158.3%NA8.3%23.7%61.7%93.9%25.4%
Book Value per Share (Rs.) 20.9720.7321.0121.2222.2523.2624.8927.4332.9538.96
Adjusted Net Profit 41.6133-1.830.833.341.366.8129162
Net Op. Cash Flow (Rs. Cr.) 76.680.668.347.614279.3115178115234
Debt to Cash Flow from Ops 4.224.065.519.142.734.892.932.372.841.13
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.
Meghmani Organics Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 7.3%11.4%15.8%15.2%
Adjusted EPS 16.4%39.4%57.8%25.4%
Book Value per Share 7.111.916.118.2
Share Price 28.1% 27.3% -11.2% 46.9%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 8.062.450.56-0.335.575.756.7410.0316.8217.71
Operating Profit Margin (%) 10.049.137.556.4510.8412.4912.7414.0516.7414.63
Net Profit Margin (%) 4.81.580.4-0.23.253.473.945.399.169.97
Debt to Equity 0.610.620.70.810.680.660.530.60.390.27
Working Capital Days 239256283258234223215192194191
Cash Conversion Cycle 12613715013112112310695105102
Entity Percentage Holding
Promoters 51.58%
Institutions 1.55%
Non-Institutions 46.87%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Meghmani Organics Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that Meghmani Organics Ltd. is a below average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Meghmani Organics Ltd.'s performance infers:

Meghmani Organics Ltd. earnings have grown by 39.4%, whereas share price has appreciated 27.3% 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 Meghmani Organics Ltd. share prices over the last 10 years. Here is what we found out:

Meghmani Organics Ltd. share price has appreciated 16% annually over the past ten years.

It was in 1986, when Gujarat Industries was established as a partnership firm in Gujarat to manufacture pigments. High productivity and profitability transformed Gujarat Industries to a joint stock company, under the name of Meghmani Organics Limited, by 1995. Since then Meghmani Organics Limited has diversified its business interests to include a range of pesticides and other pigment products as well.

Meghmani Organics Limited is a leading manufacturer of pigment and pesticide products

It was in 1986, when Gujarat Industries was established as a partnership firm in Gujarat to manufacture pigments. High productivity and profitability transformed Gujarat Industries to a joint stock company, under the name of Meghmani Organics Limited, by 1995. Since then Meghmani Organics Limited has diversified its business interests to include a range of pesticides and other pigment products as well.

Meghmani Organics Limited is a leading manufacturer of pigment and pesticide products in the country and is the recipient of several prestigious awards in recognition of its outstanding business performance.

Sound fundamentals, outstanding export performance, strong presence in the domestic market and a focused management team has seen Meghmani Organics Limited grow at a compounded annual growth rate (CAGR) of 17% and profits 10% over the past 3 years.

The Rs 6000 million Meghmani Organics Limited is:

  • One of the largest producers of pigment blue in the world
  • One of the leading producers of pigment green
  • One of the largest producers of pesticides in India

More than 80% of its pigment products and over 50% of its pesticides products are exported the world over. The company has four multifunctional production facilities in Gujarat (India) of which three are ISO 9001-2000. The production facilities are strategically located with high accessibility and close proximity to source of raw material.

The company has the necessary facilities to treat liquid / solid waste and air emission that contain pollutants, in accordance with the requirements of the Gujarat Pollution Control Board ('GPCB'). It is ISO certified and follow sound Health, Safety and Environmental policy.

The production facility of company is situated in Gujarat. It had two pigment production plants in Vatva and Panoli near Ahmedabad and two agrochemical plants in Chharodi and Ankleshwar.

Product range of the company includes:

Pigments- The pigment products which are manufactured basically fall into three main categories -- Pigments for Plastics - Pigments for Printing Inks - Pigments for Coatings

Pesticides- The agrochemical products which are manufactured fall into three main categories -- Technical Products - Formulation Products - IntermediatesIts agrochemical products are used in crop protection, public health, termite & insect control and veterinary applications.

New Products- Hysol-P based CPC Blue product.

Milestones of the company:

  • 1986: Began operations to produce Phthalocynine Green 7, popularly known as Pigment Green 7 at the Vatva plant.
  • 1995: Diversified into manufacture of Agrochemicals at Chharodi plant.
  • 1996: Expansion of pigments business. Panoli Plant was established to manufacture CPC Blue. CPC Blue is a key raw material used for the manufacture of Pigment Blue (15) and Pigment Green (7) Products.
  • 2003: Ankleshwar plant was acquired to expand the company's range of Agrochemical Products.

Awards/Achievements

  • 1994-1995 -National export award from the President, Government of India Award from Basic Chemicals, Pharmaceuticals & Cosmetics Export Promotion Council (CHEMEXCIL), MumbaiCertificate of merit for outstanding export performance from the Ministry of Commerce, Government of India
  • Award for excellent export performance from the Government of Gujarat 
  • 1995-1996 National export award from the President, Government of India. Export award from Gujarat Dyestuffs Manufacturers' Association (GDMA), Ahmedabad
  • 1996-1997 Award for excellent performance in exports by the Federation of Indian Export Organization, Government of IndiaTrophy for export performance from GDMA, Ahmedabad Certificate of merit for outstanding export performance from the Ministry of Commerce, Government of India
  • 1997-1998 Award for direct export of self manufactured dyes by GDMA, AhmedabadAward for export performance from GDMA, Ahmedabad
  • 2000-2001 Award for excellent performance from CHEMEXCIL, MumbaiAward for appreciation of export performance from GDMA, AhmedabadSix Sigma award from General Electric
  • 2002-2003 Award in appreciation of export performance from GDMA, Ahmedabad
  • 2002-2003 'First Award' for outstanding export performance from Chemexcil, Mumbai
  • 2003-2004 Certificate of Excellence - the “Niryat Shree” award in the Chemicals, Drugs, Pharma and Allied products - Non-SSI Category, from the Federation of Indian Export Organisations (“FIEO”) for its outstanding export performance
  • 2003-2004 Certificate of Excellence - the “Niryat Shree” award in the Chemicals, Drugs, Pharma and Allied products - Non-SSI Category, from the Federation of Indian Export Organisations (“FIEO”) for its outstanding export performance
  • 2004-2005 Silver Trophy - the “Niryat Shree” award in the Chemicals, Drugs, Pharma and Allied products - Non-SSI Category, from the Federation of Indian Export Organisations (“FIEO”) for its outstanding export performance
  • 2005 Certificate of Appreciation for Safety Records rom the Gujarat Safety Council (Ankleshwar site)SIAS Investors Choice Award for the most transparent company
  • 2006 SIAS Investors Choice Award for the most transparent company.
  • 2010 Meghmani Organics Ltd as inaugurated its new agrochemical production facility at Dahej
  • 2011 Execution of Primary Joint Venture Agreement of CPVC project in India between Kaneka, Meghmani and Mitsui
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323

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