Rs 50 to Rs 244: This small cap chemical company delivered nearly 400% returns in the last 2 years!

Rs 50 to Rs 244: This small cap chemical company delivered nearly 400% returns in the last 2 years!

by 5paisa Research Team Last Updated: Dec 11, 2022 - 03:39 am 24.4k Views
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An investment of Rs 1 lakh in the shares of this company two years ago would have turned to Rs 4.8 lakh today!

Thirumalai Chemicals Limited (TCL), an S&P BSE SmallCap company, has delivered multibagger returns to its investors in the last 2 years. During this period, the company’s share price has steadily appreciated from Rs 50.2 on 23 June 2020 to Rs 244.50 on 21 June 2022, an increase of 387% over the two years.

The company is one of the largest producers of Phthalic Anhydride, Malic Acid, Maleic Anhydride and Fumaric Acid in the world. Phthalic Anhydride is an important aromatic Di-Carboxylic Acid Anhydride, which is mainly used to manufacture Alkyd Resins for Paints, Inks and Coatings, Unsaturated Polyester Resins Plasticizers and Pigments.

Malic acid can be blended with multiple food acids, sugars, high-intensity artificial sweeteners, flavours and seasonings to create distinctive taste experiences in foods, beverages, and confections. Fumaric acid is used in the manufacture of medicines, drinks, food, animal feed, cleansing agents, unsaturated polyester, alkyd resins and printing inks.

The company has a strong foothold in more than 34 countries. With offices in India and Malaysia, TCL continues to expand and build businesses in new markets.

The extraordinary appreciation in the share price has been accompanied by a brilliant financial performance. From March 2020 to March 2022, the company’s topline has more than doubled, going from Rs 281 crore to Rs 583 crore. The bottom line too, exhibited a multifold jump during the same period, going from Rs 2 crore to Rs 90 crore in the last 8 quarters.

The company is currently trading at a TTM PE of 8.9x, as against the industry PE of 28.41x. In FY22, the company delivered an ROE & ROCE of 25.92% and 32.43%, respectively.

At 11.55 am, the shares of Thirumalai Chemicals Ltd were trading at Rs 240.50, a decrease of 1.64% from the previous day’s closing price of Rs 244.50 on BSE.

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