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Thursday, 19 September 2013

Mangalam Organics (Prev. Dujodwala Products) Stock Analysis

Current Stock Price Market Cap
Fair Value Long Term Target Multibagger Potential
 Rs.10.1  Rs. 9.14 crores
 Rs.28

BSE Code: 514418

Dujodwala Products (Now to be named as Mangalam Organics) is a manufacturer of Caphor, Sodium Acetate and other organic chemicals such as Rosin, Terpene Chemicals and other by products. It sells Camphor under the brand name "Mangalam". It has a long operational history in this industry. Their annual reports does'nt divulge much details about the company's plans or its product performance etc.. But I found this to be very attractive on low price to book value and trading at less than its EBITDA.


Financials (Rs. In Crores Except Ratios) Historical Stock Performance
Year Revenues PAT EPS EBITDA Dividend DEBT Equity Debt to Equity Low Price Rs. High Price Rs Low PE High PE
2009 112.91 0.55 0.64 6.65 0 13.52 25.53 0.53 4.02 9.84 6.24 15.27
2010 146.59 7.21 8.38 14.66 0.86 12.39 31.66 0.39 4.22 29.4 0.5 3.51
2011 191.62 9.65 9.13 22.89 0.9 31.05 40.09 0.77 25.55 60.95 2.39 5.71
2012 220.89 3.35 3.17 13.71 0 50.94 43.03 1.18 22 44.4 5.94 11.98
2013 210.84 3.48 3.84 14.86 0 39.32 46.21 0.85 10.55 23 2.74 5.98

The stock had fallen from a high of Rs. 60.95 to just about Rs. 10.1 currently. It is trading at less than 0.2 Price to book value and is available at close to just 3 PE. The recent quarterly performance has also been OK with company expected to maintain close to its 2012, 2013 EPS performance in 2014 also. But like all chemical companies, there should also be a cyclical upswing in its performance like it happened in 2010 and 2011 and if the company can repeat similar performance in the coming years, a price rise to Rs. 60 cannot be ruled out. This scenario does present multibagger opportunity in this stock. But due to less information available, it is very difficult to take a call on this company on fundamental basis. Also their dividend payouts has been inconsistent. By following the quarterly results, if there are visible signs of good performance, it can be used for trading purposes.

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