ATS Company Reports: Adi finechem ltd. Access Company Reports here: http://www.adityatrading.in/Research-Reports.aspx

2. Company Details
Adi Finechem Limited operates as a specialty oleo chemical manufacturing company in India and
internationally. It offers oleo chemical products, which include dimer fatty acid, monomer fatty acid, linoleic
fatty acid, and soya fatty acid for use in amines, alkyd resins, plasticizer emulsifiers, polyamides, lubricants,
metal soaps, and enzymes; distilled fatty acid for alkyd resins and textile auxiliaries; saturated fatty acid for
use in alkyd resin, amines, and esters; glycerin for use in textile auxiliaries and paints; and oil for industrial
purposes, including oil feed chemicals, biodiesel, and mould release agent. The company also provides
intermediate nutraceutical and health products, such as natural concentrated tocopherols for the natural
vitamin E/food, feed, and cosmetic industries; and natural concentrated sterols for the natural sterols, food,
and pharmaceuticals industries. Adi Finechem Limited was formerly known as H. K. Finechem Limited. The
company was incorporated in 1985 and is based in Ahmedabad, India.
Oleochemicals are chemicals derived from Plant and Animal Fats. This includes Fatty Acids, Fatty Acid Methyl
Esters (FAME), Fatty Alcohols, Fatty Amines and Glycerol. Adi Fine is a leader in this segment. These
products find applications in Paints, ink, Liquid Soap, Amines, Amides etc.This segment contributed 97 crs
revenues in FY14.
Nutraceutical is the term applied to products that range from isolated nutrients, dietary supplements and
herbal products, specific diets, genetically modified food, and processed foods such as cereals, soups, and
beverages. This finds application in Food Industry, Pharmaceuticals, Cosmetic Industry, Natural Vitamin E etc.
This segment contributed 55 crs revenues in FY14.
The current market capitalisation stands at Rs 459.06 crore.The company has reported a standalone sales of
Rs 37.01 crore and a Net Profit of Rs 2.95 crore for the quarter ended Dec 2014.

3. Category No. of Shares Percentage
Promoters 8,620,083 62.49
General Public 3,908,920 28.34
Other Companies 430,585 3.12
Foreign Institutions 390,867 2.83
NBFC and Mutual
Funds
234,562 1.70
Foreign - NRI 186,839 1.35
Others 22,144 0.16
Market Cap (Rs Cr) – 466.93
Company P/E – 27.32
Industry P/E – 47.20
Book Value (Rs) – 34.28
Dividend (%) – 15%
EPS (TTM) – 12.39
Dividend Yield (%) – 0.44%
Face Value (Rs) – 10
Share Holding Pattern Financial Details

4. Company Details
Indian Chemical Industry is contributing around 6-7 percent of the Indian GDP. It touches our lives in many
different ways. Whether it is thermoplastic furniture we use, or a synthetic garment we wear, or a drug we
consume – we are inextricably linked to it. This industry has key linkages with several other downstream
Industries such as Automotive, Consumer durables, Engineering and Food processing. This needs an annual
growth rate of 15.5 percent, for this Speciality and Knowledge Chemical segment must grow at 16.4
percent(Current rate 7.9 percent) and 27 percent(Current rate 12.3 percent), while Basic Chemical
segment would need to sustain current growth rate of 7.7 percent. At USD 100 billion, the industries
contribution to India’s GDP will grow to 12 percent and its share of the Global Industry will increase from 1.9
percent to 3.9 percent while if the current growth rate are maintained, the Industry is expected to grow to USD
60 billion by 2010. In that case, the Industry’s contribution to India’s GDP would increase to 7.1 percent and
its Global Share would increase to 2.3 percent. The size of the Global Chemical Industry is estimated at
approximately USD 1.5 trillion. The Indian chemical industry remains a net importer with a trade deficit of
around USD 1.3-1.8 billion annually.
Some Indian companies have created sizable international operations also. Some Global companies have
already given better performance in India. The operating profit margin(OPM) of these Indian subsidiaries
range from 8 percent to 13 percent as compared to the global OPM range of 1 to 6 percent.
Globally Chemical Industry is a knowledge based industry with significant investment in R&D. The industry
supplies to all sector of the economy and produces more than 80000 products. World wide market
share Chemical Industry is (1) Asia 26% (2) Western Europe 43% (3) North America 22% (4) South America
4% (5) Rest of the world 5%.Raw material costs range from 30 to 60 percent of sales, and are a major
constituent of costs. Natural Gas or Crude is used to fulfill feed stock requirements.

5. Balance Sheet
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Sources Of Funds
Total Share Capital 12.54 11.40 9.50 9.50 9.50
Equity Share Capital 12.54 11.40 9.50 9.50 9.50
Reserves 34.75 19.41 14.25 7.98 4.02
Networth 47.29 30.81 23.75 17.48 13.52
Secured Loans 23.27 12.52 20.26 10.12 8.34
Unsecured Loans 4.55 4.55 0.00 4.03 4.66
Total Debt 27.82 17.07 20.26 14.15 13.00
Total Liabilities 75.11 47.88 44.01 31.63 26.52
Application Of Funds
Gross Block 56.76 48.47 45.08 36.46 34.87
Less: Accum. Depreciation 23.96 21.39 19.34 17.52 15.86
Net Block 32.80 27.08 25.74 18.94 19.01
Capital Work in Progress 11.63 1.33 1.55 3.53 0.28
Investments 0.00 0.00 0.00 0.00 0.00
Inventories 15.74 9.91 9.52 8.33 6.68
Sundry Debtors 21.28 15.40 14.11 6.75 2.90
Cash and Bank Balance 0.07 0.05 0.12 0.17 0.08
Total Current Assets 37.09 25.36 23.75 15.25 9.66
Loans and Advances 6.13 5.86 3.38 1.55 2.18
Fixed Deposits 0.00 0.00 0.00 0.17 0.14
Total CA, Loans & Advances 43.22 31.22 27.13 16.97 11.98
Current Liabilities 9.04 9.86 8.82 6.30 4.34
Provisions 3.53 1.89 1.57 1.50 0.42
Total CL & Provisions 12.57 11.75 10.39 7.80 4.76
Net Current Assets 30.65 19.47 16.74 9.17 7.22
Total Assets 75.08 47.88 44.03 31.64 26.51
Contingent Liabilities 5.64 3.91 0.92 0.88 0.73
Book Value (Rs) 37.71 27.03 25.00 18.40 14.23

6. Profit and Loss Account
Mar '14 Mar '13 Mar '12 Mar '11 Mar '10
Income
Sales Turnover 151.82 123.10 96.52 61.37 40.71
Excise Duty 0.00 0.00 0.00 4.01 2.32
Net Sales 151.82 123.10 96.52 57.36 38.39
Other Income 0.56 0.11 0.89 0.62 0.14
Stock Adjustments -0.59 0.65 -1.07 1.02 -1.58
Total Income 151.79 123.86 96.34 59.00 36.95
Expenditure
Raw Materials 95.53 89.93 67.70 37.51 23.89
Power & Fuel Cost 10.62 9.04 7.60 5.56 5.90
Employee Cost 5.56 4.17 3.43 2.81 2.66
Selling and Admin Expenses 0.00 0.00 0.00 1.33 0.93
Miscellaneous Expenses 6.39 3.35 2.73 0.55 0.63
Total Expenses 118.10 106.49 81.46 47.92 34.22
Operating Profit 33.13 17.26 13.99 10.46 2.59
PBDIT 33.69 17.37 14.88 11.08 2.73
Interest 2.66 2.48 2.10 1.44 1.69
PBDT 31.03 14.89 12.78 9.64 1.04
Depreciation 2.64 2.27 1.98 1.73 1.69
Profit Before Tax 28.39 12.62 10.80 7.91 -0.65
PBT (Post Extra-ord Items) 28.39 12.62 10.80 7.91 -0.71
Tax 9.71 4.24 3.42 2.84 -0.16
Reported Net Profit 18.68 8.39 7.37 5.07 -0.56
Total Value Addition 22.56 16.56 13.76 10.41 10.33
Equity Dividend 1.88 1.14 1.10 0.95 0.00
Per share data (annualised)
Shares in issue (lakhs) 125.40 114.00 95.00 95.00 95.00
Earning Per Share (Rs) 14.90 7.36 7.76 5.33 -0.59
Equity Dividend (%) 15.00 10.00 10.00 10.00 0.00
Book Value (Rs) 37.71 27.03 25.00 18.40 14.23

7. Dividend and Bonus History

8. Index and Company Price Movement Comparison

9. Company Forecast

10. Symbol Value Action
RSI(14) 70.990 Buy
STOCH(9,6) 75.392 Buy
STOCHRSI(14) 2.130 Oversold
MACD(12,26) 87.390 Buy
ADX(14) 74.335 Overbought
Williams %R -29.050 Buy
CCI(14) 76.8979 Buy
ATR(14) 62.9643 High Volatility
Highs/Lows(14) 35.9571 Buy
Ultimate Oscillator 47.919 Sell
ROC 95.157 Buy
Bull/Bear Power(13) 120.8480 Buy
Technical indicators

11. PBIT – 20.01 v/s 12.14
RoCE – 41.34 v/s 32.08
RoE – 47.09 v/s 30.9
Net Profit Margin – 12.25 v/s 6.79
Return on net worth – 39.50 v/s 27.21
D/E Ratio – 0.59 v/s 0.55
Interest Cover – 11.69 v/s 6.20
Current Ratio – 0.80 v/s 0.89
Reserves – 34.7 cr v/s 19.41 cr
PAT – 18.68 cr v/s 8.39 cr
Total assets – 75.08 cr v/s 47.88 cr
Net sales – 151.82 cr v/s 123.10 cr
Book Value – 37.71 v/s 27.03
Days BSE
30 346.01
50 333.22
150 300.31
200 266.48
Important Ratios Simple Moving Average

12. Recommendations
Buy Adi Finechem Ltd at current or lower
market levels
Reasons for the recommendations are :
Niche segment and monopoly for the products.
Less cost of production when compared with its peers.
Huge difference in profit margins for the products.
Growth in economy will result in increase in demand for the products.
Clients include major national and international players.
Sound financial position and healthy ratios.
Impressive track record of the company in the recent years.