Multibagger Returns in 30 days
This Birla Group Company almost tripled the investor’s money in less than a month. This multibagger stock traded at a 113 Rs on August 1, 2018 and saw back to back UCs over the entire month of August to hit 329 Rs on September 3, 2018. The stock multiplied the money on the back of strong Q1 results announced on August 9, 2018. Due to the fast rise in the stock, SEBI placed it is ASM resulting in the stock to come down to 297 Rs today. This company is Tanfac Industries Limited, and it still has some steam left.
Incorporated in 1972, Tanfac Industries Limited is a joint venture company promoted by the Aditya Birla Group and the Tamil Nadu Industrial Development Corporation (TIDCO). Tanfac is one of India’s largest suppliers of organic and inorganic fluorine-based chemicals such as Aluminium Fluoride, Anhydrous Hydrofluoric acid, Sodium Silico Fluoride, Ammonium Bifluoride, Potassium Fluoride, Cryolite and other organic fluorine-based chemicals. Fluorine-based chemicals find vital applications in industries such as aluminium smelting, petroleum refining, refrigerant gases, steel re-rolling, glass, ceramics, sugar, fertilizers, heavy water, etc.
Excellent Q1 Results
The company saw revenue growth of 42% YoY in Q1 on higher sales realization of HF and Aluminium Fluoride. The company saw its Q1 PAT grow to 13.08 crores from 2.32 crores YoY taking the Q1 EPS to 13.12. The company’s operational performance also improved with a reduction in raw material and finance costs from the last quarter. The company is expected to maintain and even improve the EPS in coming quarters. But, even if we extrapolate the Q1 EPS, annual EPS for this fiscal should be more than 52. Being in the specialty chemicals sector and with a strong parentage, even a 15 P/E can still multiply the money for investors further.
The company has market capitalization of 296 crores INR. The company has clocked profits of 20 crores INR last fiscal with 13.08 crores in the last quarter alone. The company is expected to increase its annual profits to around 55-60 crores INR. The company has been reducing debt with present Debt to Equity levels at 0.53. With the increase incoming cash flows, the company can become debt free in 2 years. The promoters holding is around 51% which looks comfortable as well.
Stuck in ASM
As has been the case with multiple fast growing stocks, TANFAC was placed in ASM by SEBI a couple of days back. After which, the stock has given back to back lower circuits. It might witness further selling in coming days before stabilizing. Overall, the stock still looks like a value buy even after the big rise with bright future prospects and good fundamentals.
Disclaimer: I am not a SEBI registered analyst and not advising anyone to buy. The purpose of this article is to share my viewpoint about fundamentals and the future prospects of the company. So, please do not consider this as an investment tip. Talk to your financial advisor before taking any investing call.
Hi, I am Azhar, a management graduate from IIM Bangalore. I work as a manager in a FMCG firm. From college days, I had a lot of interest in equity markets. My passion for teaching led me to setup this site to educate retail investors about stock markets investments. Looking forward to learn and grow with you. Happy investing !!