I am trying to put up a review of this company which seems to me as having a great potential for medium term investment. India glycols is engaged in the manufacture of Glycols, ethooxilates, PEG's, peformance chemicals, Glycol ether and acetates, guar gum and potable alcohol.
Interestingly this is the only company in the world to use renewable agro route using molases to manufacture Ethylene Oxide and mono ethylene glycol.
Mono ethylene glycol is a keyingredient to make any kind of polyster (fibre, yarn, film, chips etc), and its price moves with that of crude oil. So, high oil prices is a boon for the company as it pushes the price of MEG. The company benefits from the molasses route as its cost of production is significantly lower than other producers who make it from crude. The MEG capacity has also been expanded in recent past. The prices of MEG have been on a rise and have risen from $880 in march 07 to around $1200 now. This is likely to boost margins significantly for the company.
To improve raw material security the company has commissioned a facility to produce molases directly from sugar juice thus reducing its dependence on sugar factories. The manucturing facility are located at Kashipur, uttranchal which is the key hub of sugar industry.
The company has a wide marketing network covering asia, europe america, australia and south africa.
The stock of this company is held by many mutual funds including DSP ML micro cap fund, DSP ML tax saver fund, HDFC capital builder fund and Sundram leadership fund.
During the last financial the company posted a net profit of Rs410 million on an equity base of 278 million. The company has posted a total profit of 1513 million during the nine months period of april to dec 07. This results in to a EPS of Rs 54 for this period.
This makes this company an excellent investment opportunity.
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