Multibagger alert: This chemical stock from the portfolio of Ashish Kacholia has grown 11x in 2 years!

Multibagger alert: This chemical stock from the portfolio of Ashish Kacholia has grown 11x in 2 years!

by 5paisa Research Team Last Updated: 2022-06-20T15:50:37+05:30

An investment of Rs 1 lakh in the shares of this company 2 years ago would have turned to Rs 11 lakh today!

Vishnu Chemicals Ltd, a speciality chemical company, has delivered multibagger returns to its shareholders in the last 2 years. During this period, the company’s shares have risen from Rs 123.95 on 22 June 2020 to Rs 1,362.25 on 17 June 2022, representing an appreciation of 1000%!

The company’s share price performance is backed by an equally strong financial performance. In the last 8 quarters (from March 2020 to March 2022), the company’s topline has grown over 110%, going from Rs 156 crore to Rs 334 crore. Similarly, the bottom line has increased from Rs 5 crore to Rs 29 crore, representing a growth of 480%!

Ace investor Ashish Kacholia is one of the investors in the company. Popularly known as the ‘Big Whale’, he has held a stake in the company since December 2015. Currently, he owns 5 lakh shares of Vishnu Chemicals, representing a stake of 4.19%. 

Vishnu Chemicals Limited is engaged in the business of manufacturing, marketing and export of Chromium chemicals (~85% of the revenue) and Barium compounds (~15% of the revenue) across the world. With its headquarters in Hyderabad, the company caters to the needs of more than 12 industries across 57 countries globally. 

The company’s supply footprint includes all the major geographies such as Asia, China, South East Asia, Europe, UK, North, South and Central America, and Africa among others.

Growth drivers:

Chromium chemicals segment- Owing to the benefits of untarnished, uniform and corrosion-resistant properties of chromium chemicals, their usage in several industries is on a rise.

Barium compounds segment- The rising preference for a luxury living has increased the demand for ceramic tiles, which in turn has fueled the demand for barium carbonate.

Furthermore, considering the current rising rates scenario, it should be noted that the company is consistently improving its debt-to-equity ratio. Its interest coverage ratio stands at 5x.

Looking at the valuations, the company is currently trading at a TTM PE of 19.99x, as against the industry PE of 28.22x. In FY22, the company delivered an ROE & ROCE of 29.40% and 28.65%, respectively.

At 1.04 pm, the shares of Vishnu Chemicals Ltd were trading at Rs 1,410, an increase of 3.51% from the previous closing price of Rs 1,362.25 on BSE. The stock has a 52-week high & low of Rs 1,789.95 and Rs 452.45, respectively on BSE.

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About the Author

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