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SRF Limited is a chemical-based, Multi-business Conglomerate engaged in the manufacturing of Industrial and Specialty Intermediates. The Company is widely recognised and well respected for its R&D capabilities globally, especially in the Niche Domain of chemicals. Company is a Market Leader in Most of its Business Segments in India, with a significant global presence. The … Read more
Founded in 1989, Vinati Organics Ltd. (VOL) Integrated Business Model has helped it to transform from a single product company to one of the world’s largest manufacturers of key specialty chemical products, while serving the customers across the globe.
As a market leader for key specialty chemicals (especially for ATBS & IBB where it commands more than 65% of global market share), VOL products play a very important role for several downstream industries. As such company is on the track to further expand its Niche Portfolio of products, which will enable Import Substitution and Create Superior Value for all the Stakeholders.
Vinati Organics is among the few companies in the sector with Sustained capacity expansion with Low-Gearing. This is a result of Prudent capital allocation and Disciplined cost management, resulting in high cash generation.
Hence company’s market capitalisation has grown by 49x between March 2012 to March 2022, while it was expanding its product portfolio through strategic CapEx all funded by the internal accruals.
It has become a consistently Free Cash Flow (FCF) generating Growth Engine which may last forever, given the multiple industries which VOL’s products caters to and the Structural Tailwinds to the Specialty Chemicals sector which Vinati Organics operates in.
India’s $212 billion chemical industry is seeing unprecedented growth on the back of consumption economy, demand for niche products, rapid import substitution, and a Global Geo-Strategic demand shift from China due to supply-chain disruption (China+1 Strategy). Further, the challenge in Europe amid the war between Ukraine and Russia, has added on to such opportunities (Europe+1 Strategy) for the companies in this vast industry.
Within this Chemical Industry, Speciality Chemicals & Agro-Chemical Space has long-term structural growth for the reasons as cited above, along with stronger demand for their Niche products, opportunities in Contract Research and Manufacturing Services (CRAMS) and Import Replacement Prospects (focus on Backward Integration to reduce Raw Material imports) and Long Term Competitive Advantage due to stronger R&D capabilities are some of the reasons to believe that – These 6 Specialty Chemicals & 2 Agrochemicals Stocks has long runway of Growth.
