Prolife Industries...Niche industry ...a Potential Multibagger

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Prolife Industries

CMP: 159.7

Current market cap: 63 Cr


 1. Company engaged in mfg of Dyes, Pigments, pharma and agro chemicals

2. After the demise of previous MD, his son taken over the responsibility of MD – He is just 28 years old but has extensive experience in R & D

3. Future growth

a. Mgt planning for 150-200 Crs topline as the company invested in capex in the last 3-5 years from their cash flows

b. New products added with better margin joining

i. Violet acid which has world wide demand – they are tapping eurpoean markets

ii. Very few players in producing this

iii. Continous spending on R&D and getting

c. Superb ROCE maintaining above 25%

d. Fantastic cash management – entire cash cycle is less than a month

e. With a net margin of 20-25 crs and higher ROCE, it can demand higher multiples of 40 times and can be a 1000 cr enterprise value (bcoz of net debt free too)

4. Deployed experienced mgt across different countries to grab more export share

5. Managemente is highly specialised in cosmetics business too – Yushika Cosmetics – Very good reviews on its products where the application is on hair colouring

a. Down the line , expecting it to integrate the same in the main business

6. Share holding

a. Promoter holding– 73%

b. Very less float – Only few individual investors and rest other are body corporates

c. Since it is in SME category, minimum lot size is 3000

7. Good margin of safety – Intrinsic Value 170

CA Jagadeesh Atukuri

Comments

  1. Ratan15 November 2022 at 21:50

    Thanks for sharing this.
    Your picks are fantastic. Let's see how this pans out.

    ReplyDelete
  2. Sridhar Reddy15 November 2022 at 22:05

    Thanks for the information and Analysis. But the problem is that it's a circuit based stock.....entry is easy and exit is the biggest risk....

    ReplyDelete
    Replies
    1. Jagadeesh A16 November 2022 at 02:25

      Just work on the analysis

      Need not invest, atleast observe what's happening in the company

      Delete

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