Skip to main content

Chemcrux Enterprises

Rural areas offer a more favorable environment compared to metropolitan cities. During my second wave of COVID vacation, I had the opportunity to spend time in my hometown and I discovered that it was a source of great inspiration and ideas. Although I have always been intrigued by stock market books, most of the ones I came across were from Western countries. This led me to search for books specifically focused on the Indian stock market, and that's when I came across an incredible book titled "How to Avoid Loss and Earn Consistently in the Stock Market" by Prasenjit Paul. I read the entire book during my journey from my hometown to Ankleshwar and upon finishing it, I was deeply moved by his story. While I generally have an independent mindset when it comes to my investments, I find myself giving a second thought to stocks recommended by individuals like Prasenjit Paul.

What type of company makes wealth for shareholders?

About

  • Chemcrux Enterprises is a Gujarat-based company dealing in the manufacturing of chemical intermediates for bulk drugs, dyes, and pigments. In 2018 they are finding good import substitutes and high-value products.


Management quality

  •  It was incorporated in 1996 by technocrat promoters Girish Shah and Sanjay Marathe from IISc. / IIT. Management is sound in technical knowledge & humble. Source AGM, valuepickr. 


Products

  1.  FUROSEMIDE: Sold under the brand name “Lasix”, the product is used for the treatment of fluid build-up due to heart failure, kidney diseases, high blood pressure, hypertension, etc.
  2. Mefenamic acid: Used for the treatment of mild to moderate pains from various conditions including blood loss from menstrual periods.
  3. Mebendazole: Used to treat parasitic worm infestations including pinworm, hookworm, etc. Its application is also currently being tested as an anti-cancer treatment.
  4. Chlorpromazine: Its primary usage is to treat psychotic disorders such as schizophrenia, bipolar disorder, etc.

The only producer of benzoic acid in this country.


CAPEX play

  • Management expects a 2.5x planned CAPEX, and there is clear growth visibility. Even conservatively, the earnings should become 3x over the next 5 years and sales go around 172 cr,.There is a little bit of progress on the EC for CAPEX and they get EC approval in June 2022. 


Fundamental of Company

  •  Promoter holding is 72.94
  • Debt to equity < 0.5. 
  • ROE & ROCE more than 30%.
  • The company is doing CAPEX from internal accrual. The cash position of the company is good. 

My rationale.

  • CAPEX and high-value addition of products are always in line with what management has said.
  • Opportunity is large in terms of CHINA plus one strategy.
  •  Currently received EC norm for CAPEX is triggered.
  • The balance sheet is strong. 

Risk

  • Small in size.
  • Ankleshwar has strict norms for the pollution control board.



Comments

Post a Comment

Popular posts from this blog

No More 'Buy and Hold' – Try 'Buy and Monitor' for Better Investments

Ever wonder how some people consistently make more money in the stock market? It's not magic – it's a mix of paying attention and making smart choices. Let's explore the simple tricks these successful investors use to get better returns than the average. Listen to Insiders: What They Know Matters Successful investors keep an ear out for insider trading updates. Why? Because if someone inside a company is buying or selling their own company's stock, they might know something good or bad is coming. Buybacks & Rights Issues: Company Confidence and Cash In Smart investors like it when companies buy back their own shares or offer existing shareholders the chance to buy more at a discount. It's like the company saying, "Our stock is a good deal!" IPOs & Big Corporate Announcements: Ride the Wave of News Beyond new companies going public (IPOs), successful investors pay attention when companies make Corporate   big announcements. Events like demergers, me...
Post a Comment
Read more

"MOAT"

In simple terms, MOAT means competitive advantage. When you are competing with others, you need some advantages over other people. For example, when you have a good book or mentor who doesn't have anyone for the exam. People always find mistaken moats. Moats like great products, strong market share, great execution, and great management. Let's analyse real moats for companies. 1) the cost of switching; 2) intangible assets  3) cost advantage 4) The network effect      C ommonly, switching bank accounts is mentally hectic . Normally, people don't want to switch their bank accounts very easily. It is the same when Infosys or TCS provide any service to the government or banks that is hard to switch. There is a switching cost for customers.      Patents, copyrights, and brand value, which is the biggest moat for pharmaceutical companies or any company which requires government permission to operate. like chemical plants. These are intangible assets....
Post a Comment
Read more

Heart vs. Mind

There is always a conflict between heart and mind. weather in a life partner, career, money spending, investing, etc. your heart is weak to make decisions. heart always follows short-term gratification which is mostly wrong. so here we can discuss the difference between them.       The brain changes continually as a result of our experiences. Experiences produce physical changes in the brain either through new neural connections or through the generation of new neurons. Studies suggest that the brain can change even during the day. This means that the anatomy of the brain varies from individual to individual. Even identical twins with identical genes don't have identical brains. They have had different life experiences. Experiences are the reason that all individuals are unique. There are no individuals with the same upbringing, nutrition, education, social stamping, physical, social and cultural setting. This creates different convictions, habits, values, an...
Post a Comment
Read more