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GHCL
- 1. COMPANY- GHCL LTD. SAPM PRESENTATION PRESENTED BY : ADITYA MEHTA MBA 2A
- 2. India – Fastest growing economy with a growth rate of 7.6% in FY16 Latest GDP growth rate 7.1% for Q1 FY17 Expected GDP growth rates to go upto 8%. GDP size – $2.07 trillion Consumer spending to get a boost due to OROP and 7TH PAY COMMISION Interest rates (current repo rate) – 6.25% CPI Inflation – 4.31%
- 3. Chemical industry contributes 2.11 per cent of the gross domestic product (GDP) Indian chemical industry is the third largest producer in Asia and sixth largest in the world. Fourth largest global producer of agro chemicals. Worth of Indian chemical industry - US$ 139 billion
- 4. Petrochemicals-22% 22% agrochemicals-3% 3% pharmaceuticals - 15% 15% Organic chemicals - 1.2% 15% inorganic chemicals- 8% 8% Soaps and detergents -11% 11% Fertilizers- 18% 18% Dyes & Paints - 5% 5% Others -3% 3% Classification
- 5. Tata Chemicals United Phosphorous Limited BASF India Glycols Pidilite Industries Vikas WSP Phillips Carbon Black Limited Gujarat Heavy Chemicals Indian polymers industry is oligopolistic in nature with only 4 large producers: Reliance Industries Ltd. (RIL) Indian Oil Corporation Limited (IOCL) Haldia Petrochem Ltd (HPL) Gas Authority of India Ltd (GAIL)
- 6. THREAT OF NEW ENTRY- Low and Will Remain Low COMPETITIVE RIVALRY - High and Increasing BARGAINING POWER OF SUPPLIERS- Moderate and Will Remain Moderate Bargaining Power of Buyers -Moderate and Will Remain Moderate Threat of Substitutes- Weak and Will Remain Weak
- 7. The Indian chemical industry is expected to grow at 9% every year to reach a market size of USD 214 billion by the end of FY 2019. Several factors are expected to drive the growth in this sector. such as :- -rising demand for specialty chemicals and pharmaceuticals segment - low per capital consumption including agrochemicals - likely growth in demand from paints, textiles and diversified manufacturing base.
- 8. About the company Incorporated on 14th of October 1983 Products- Chemicals, Textiles , Consumer products Major Product – Soda Ash 23% market share in Soda Ash and highest margin in industry in Soda Ash.
- 10. Some important Ratios EBITDA Margin – 24.82% PAT MARGIN – 10% P/B RATIO – 2.83 P/E RATIO – 8.25 (INDUSTRY P/E – 17.38) EPS – 33.83 ROE – 19.41% (Highest among peers)
- 11. TAX LIABILITY –> NET PROFIT / EBT It shows that the tax liability for the company out of net profit is 32.3% (approx) which is within the industry norms. INTEREST LIABILITY -> EBT/EBIT interest liability of the company is 40% its PBIT. OPERATING EFFICIENCY -> EBIT/SALES The company is enjoying operating margins of 24.60% which comparatively higher than its peers. ASSET UTILISATION -> Sales /ASSET The Asset utilization of the company is 1.19 FINANCIAL LEVERAGE -> ASSET/EQUITY 2.18
- 12. Cost leadership in soda ash business Textiles business has significant potential of margin expansion OPERATING MARGINS AS COMPARED TO PEERS