Amidst all this volatility, India’s super investors are as busy as they are. they look for most undervalued stocks who are ready for long term growth.
What do we mean by Super Investor of India? Thinkrakesh Jhunjhunwala, Ashish Kacholia, Sunil Singhania and other big names…
One of the prominent names among the investment gurus is Dolly Khanna.
According to the latest data, Dolly Khanna has bought an additional stake in a small-cap stock.
Read on to find out more.
Who is Dolly Khanna?
Dolly Khanna is a major Chennai-based investor who is known to choose lesser-known midcaps and smallcaps. She has been investing in stocks since 1996.
Dolly Khanna’s portfolio, which is managed by her husband Rajiv Khanna, generally leans towards more traditional stocks in manufacturing, textiles, chemicals and sugar stocks.
Which smallcap stock did Dolly Khanna buy recently?
Chennai-based petrochemical company Manali Petrochemical is the new condition of Dolly Khanna.
As per the latest shareholding pattern of Manali Petrochemical, Dolly Khanna holds a total of 1.88 million shares giving 1.09% stake in the company.
However, it is not certain whether the ace investor bought all these shares in one go during the June quarter.
Dolly Khanna’s name was missing in Manali Petrochemical’s shareholding pattern as of March 2022. But his name cropped up in the June shareholding data.
As per exchange rules, every listed company must disclose the name of each individual shareholder who owns 1% or more of the company’s shares in the quarterly report.
With Manali Petrochemical, Dolly Khanna’s interest in this smallcap sugar stock also attracted,
Why did Dolly Khanna buy into this petrochemical stock?
While we don’t know why Khanna bought into it, there are a few reasons we can guess…
#1 Better Financial Performance
For the year ended March 2022, the company reported a nearly two-fold increase in its net profit.
During the same period, net sales grew 64 percent year-on-year and reached $16.7 billion.
Take a look at a table showing net sales growth and some of the key fundamental ratios over the past five years.
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The company is also debt-free and has no long-term debt.
#2 Commercial agreement with Econic Technologies
In July 2022, Manali Petrochemical announced the execution of a long-form agreement with UK-based Econic Technologies.
Last year in September 2021, the companies signed a memorandum of understanding for new polyol technologies.
Polyols are useful in the production of flexible and rigid foams, elastomers, adhesives, sealants and coatings.
These products find application in a wide range of essential everyday products from mattresses, automotive interiors to sports and footwear.
Under the agreement, the companies will work together to introduce more environmentally friendly polyols to the US$28 billion global polyol market.
The signing of this agreement sets the stage for the commencement of the MPL-Iconic partnership.
This will include a two-year demo scale-up of the 1,300 liter reactor at Manali Petrochemical’s Plant 1.
The next three years will be spent on the industrial scale of the technology in the company’s 12,000+ reactors, as well as the commercialization of CO2 containing polyols.
Econik’s patented catalyst and process technology will not only develop a green product but will also be cost-effective. This will improve the profitability of the company in a big way.
This technology helps to incorporate consistent amounts of CO2 into the polyols to meet precise requirements for physical properties, such as strength, water resistance, etcetera.
Thus, polyols can be customized to suit the requirements of the customers.
In an increasingly environmentally conscious world, green polyols will also help the company gain a competitive edge in global markets.
#3 Foreign Institutional Investors (FIIs)
Another factor here could be foreign investors.
While FIIs have remained net sellers in the overall markets until recently, they have been increasing their stake in the company for the past five quarters.
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While all these reasons are compelling enough, remember not to get into a company’s stock just because a market guru has bought some stake.
Investing in Smallcap is not that easy!
How Manali Petrochemical India stock has performed recently
Manali Petrochemical share price has been very volatile in the past one year and has given 28.7% returns to its investors.
The stock has a 52-week high 149.7 touched on April 21 this year, while the stock touched its 52-week low 80.1 On 24 August last year.
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The stock currently trades at a price-to-book value multiplier of 1.7 times with a market cap of 18.2 billion
As of June 2022, the promoters hold 44.9% stake in the company. Institutional stake in the company grew by 0.15% and stood at 3.05% as of June 2022.
about the company
Established in 1986, Manali Petrochemical is a part of AM International Group. It manufactures and supplies innovative polyurethane raw materials and composite systems.
It caters to various industries like Automotive, Paints, Food, Appliances and Pharmaceuticals.
The company operates through its wholly owned subsidiary AMCHEM Specialty Chemicals in Singapore.
It has a presence in the UK through its step-down subsidiaries AMCHEM Specialty Chemicals and Notedome.
To know more, see Manali Petrochemicals News & Analysis,
Disclaimer: This article is for informational purposes only. This is not a stock recommendation and should not be treated as such.
(This article is syndicated from) equitymaster.com,
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