Thirumalai Chemicals is a strong player in the speciality chemicals segment and it also ranks among the largest producers in the world in all its core products. We have seen turnaround in business after a decline in crude oil prices and we believe such developments would lead the company to come up with better margin performance. For the first nine months of FY16, the company reported consolidated net profit of Rs 8.6 crore as against loss of Rs 11.06 crore in the same period of the last year. Its consolidated revenue de-grew by of 17.2 per cent at Rs 701.22 crore due to lower realisation. Operating profit reported growth of 85.3 per cent at Rs 48.08 crore along with operating margin expanded by 380 bps at 6.86 per cent. Continuous improvement in cost and efficiency will continue to be a focus in the coming year.

 

Sudarshan Chemical Industries is specialised in colours and chemicals and has acquired a strong position in the segment with over 35 per cent market share and is the largest pigment supplier. The company also enjoys a huge international presence in the organic pigments market, with sales in over 40 countries worldwide. In 9MFY16, the company’s net sales improved by 9 per cent to Rs 889 crore from Rs 816 crore in the previous year. Net profit grew by 28 per cent to Rs 49.70 crore from Rs 38.84 crore. Operating profit reported growth of 24.65 per cent at Rs 113.8 crore along with operating margin expanded by 160 bps at 12.79 per cent. On valuation front it is currently traded at around 14 times price to book value of Rs 7.7 per share on TTM basis.