Rs 405 to Rs 2,899: This stock turned into a multibagger in 1 year

Share of Balaji Amines has delivered more than 600 per cent returns to its shareholders in the last 12 months. The share stood at Rs 404.6 on May 27, 2020. It has zoomed to Rs 2,899.10 today, translating into gains of 614.37 per cent during the period. In comparison, Sensex clocked 62 per cent in one year.

Rs 5 lakh invested in Balaji Amines share a year ago would have turned into Rs 35.82 lakh today.

The stock has gained 212.6 per cent since the beginning of this year. It ended 4.35 per cent higher at Rs 2,899.10 against the previous close of Rs 2778.35 on BSE.

The share of Balaji Amines stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages. Market cap of the firm rose to Rs 9,393.37 crore.

Rajesh Agarwal, Head of Research, AUM Capital Market, told Business Today, "BAL's major thrust is to expand its portfolio of key derivative products along side entering newer specialty chemicals from both vertical integration and operating efficiencies,"

"The company also plans to expand its export market over the medium to long term, given the eagerness of global companies to reduce their exposure to Chinese sources of suppliers. The steady demand from Pharmaceutical and Agrochemical industry that comprises more than 70% of the revenue mix along with higher price realization bodes well for the company from a growth perspective," he noted.

"Q4 numbers have been strong and with the first phase of Greenfield project commencing operations for the manufacturing of Ethyl Amines with a capacity of 50 tons per day, the numbers are likely to get better going forward," he added.

The company reported a profit of Rs 84.5 crore for the quarter ended March 2021 compared to Rs 29.5 crore in the year-ago quarter. Revenue from operations in Q4FY21 rose to Rs 414 crore against Rs 258 crore in Q4FY20.  

EBITDA margin for Q4FY21 stood at 30.30 per cent, up by 669 basis points, as compared to 23.61 per cent in Q4FY20. The improvement in operating margins was primarily on account of better price realisations across most of the products and an increase in operating leverage due to a surge in volume offtake.

On the earnings performance, D. Ram Reddy, Managing Director said, "We witnessed improved demand and price realizations across most of our product portfolio, leading to much improved operating leverage and better margins. However, pandemic-related disruptions of both inbound and outbound logistics support, as well as lack of adequate supply of industrial oxygen, resulted in lower than optimal production.

"Our state-of-the-art new plant of Ethylamines, having installed capacity of 50 tons per day (16,500 tons per annum), which is part of Phase 1 of our 90-acre Greenfield Project (Unit IV) at Solapur has commenced operations from last week. Now, along with the pre-existing capacity of 6,000 tons of Ethylamines, the company has the largest installed capacity of Ethylamines in India at 22,500 tons per annum."

He further said, "With the commencement of this plant, Balaji Amines is the largest manufacturer of Methylamines, Ethylamines and other chemicals in India. The new plant of Ethylamines at Unit IV will lead to a lower cost of production due to new technology. There was a slight delay in the commencement of this new plant on account of pandemic led disruptions."

The company also informed that its subsidiary company - Balaji Specialty Chemicals Private Ltd. - witnessed a substantial ramp-up in capacity utilisation due to an increase in demand for Ethylenediamine (EDA).

The company is currently manufacturing 1,300-1,500 tonne per month, which will be further ramped up going forward, once the supply of raw material eases.

Balaji Amines Ltd (BAL) is a leading manufacturer of Aliphatic Amines in India. Broadly, the company is specialised in manufacturing Methyl Amines, Ethyl Amines, Derivatives of Specialty Chemicals, and Natural Product and its business is broadly classified into three segments - Amines, Specialty Chemicals, and Derivatives.