TANFAC INDUSTRIES
Q2 FY 21 RESULTS REVIEW
DT 28 11 2020
COMPANY OVERVIEW
Tanfac Industries Ltd. is engaged in the manufacture of chemicals such as aluminium fluoride and anhydrous hydrogen fluoride.
In addition to this, it manufactures sulphuric acid inclusive of oleum, and, speciality fluorides.
The fluorine based chemicals have vital applications in industries such as aluminium smelting, petroleum refining, refrigerant gases, steel re-rolling, glass, ceramics, sugar, fertilisers, heavy water, etc.
The speciality chemicals are used as intermediates in the manufacture of pharmaceuticals drugs and agrochemicals.
The product range of the company includes -
Inorganic Chemicals-Aluminium Fluoride, Anhydrous Hydrofluoric Acid, Cryolite (Granular), Dilute Hydrofluoric AAcid, Hydrocholric Aacid - HCL, Oleum & Sulphuric Acid.
Speciality Inorganic Fluorides- Ammonium Bifluoride,Cryolite (Powder),Fluoboric Acid, Hexa Fluoro Phosphoric Acid *,Magnesium Fluoride, Potassium Fluoborate, Potassium Fluoride, Potassium Hexa Fluoro Phosphate, Potassium Silico Fluoride, Potassium Titanium Fluoride, Potassium Zirconium Fluoride, Sodium Hexa Fluoro Phosphate and Sodium Silico Fluoride.
Speciality Fine Chemicals - HF-Pyridine Complex,Tetra Butyl Ammonium Bi Fluoride,Tetra Butyl Ammonium Fluoride Derivatives,Tetra Butyl Ammonium Fluoride Trihydrate,Tetra Ethyl Ammonium Fluoride Dihydrate and Tri Ethylamine Trihydrogen Fluoride Complexview less -
Management
V T Moorthy : Director
M R Sivaraman : Director
Shankar Narasimhan: Director
R Karthikeyan : Director
R Rajalakshmi : Director
Business Head : Mr. Kalyan Ram Madabhushi
President & CEO : Mr. K. Sendhil Naathan
CFO : Mr. N R Ravichandran
CHAIRMAN'S MESSAGE DT 28.09.2020
-EXTRACTS (FOR THE YEAR 2019-20)
your Company, had registered good performance during the year which is second highest in its history.
This was achieved despite the absence of the spot opportunities and tail winds that had helped it to register an all-time high performance during the previous year.
Post the lockdown in the last week of March due to outbreak of the pandemic, your Company had acted swiftly and got special consent from the Cuddalore District Administration and restarted the plants in phases from 8 th of April and gradually improved the operations during the first quarter.
OPERATIONS AND OVERALL PERFORMANCE:
As I said in the beginning, your Company had registered good performance during the financial year 2019-20 which is the second highest in its history. During the financial year 2019-20, your company had recorded EBIDTA, Net Profit and Total Comprehensive Income of 27.10Crores, 16.97Croresand 17.28Crores respectively.
Your Company’s sales performance had decreased by 26% at 164.80 Crores against 221.71Crores in the previous year, due to reduction in sale and price of Sulphuric Acid. This was partially compensated by higher sales realization in HF Acid due to continuous focus on niche / value added segments and also successfully passing through the increase in raw material price.
Profitability had improved significantly due to initiatives like focus on improving the share of Value added products (VAPs) and optimization of product & customer mix.
Your Company also focuses on significantly conserving cash. Tight control on working capital further helped in increasing the operating cash flow which is used to repay all its debts. This has helped the Company to significantly reduce the Finance cost to 0.84Croresfrom 3.04Croresduring the previous year. I am glad to inform you that your Company had already achieved debt-free status and poised to further improve its cash position.
Q1 FY’21 PERFORMANCE:
Despite challenging circumstances due to lock down, your Company has posted a turnover of Rs.28 crores and EBIDTA of Rs.5 crores during the first quarter of current financial year compared to turnover of Rs.32 crores and EBIDTA of Rs. 4 crores during previous quarter (4th quarter of financial year 2019-20).
Improved EBIDTA : despite reduction in turnover was due to initiative taken for increasing the share of VAPs and reduction of fixed costs.
Your Company will continue to focus on these initiatives in the remaining quarter of financial year 2020-21 and strive to reduce the impact in the overall performance of the year due to pandemic.
FUTURE PROSPECTS: Your Company has a well-calibrated strategy of customer orientation, cost optimization and product development. I am confident, your Company will emerge stronger from this global crisis and will continue its unrelenting pursuit of enhancing shareholder value, and growth in earnings and revenues. Your Company has made a comprehensive Business Continuity Plan backed up by robust periodic review at the apex level. Your Company has initiated measures to optimize operations of the plant, reduce fixed costs and conserve cash. Your Company continues to maintain a very comfortable level of liquidity to navigate this uncertain business environment and is well prepared to withstand temporary disruptions and sustain its market share across its products.With the help of ongoing and fresh initiatives proposed by the company, your Directors are optimistic about further improvements in the operational performance of the company in the coming
QUARTERLY RESULTS
|
Tanfac Industries (in Rs. Cr.) |
Sep '20 |
Jun '20 |
Mar '20 |
Dec '19 |
Sep '19 |
YOY |
QOQ |
|
Net Sales/Income from operations |
34.29 |
27.75 |
32.24 |
38.09 |
36.48 |
-6 |
23.57 |
|
Net Profit/(Loss) For the Period |
4.74 |
2.58 |
3.65 |
3.85 |
1.58 |
200 |
83.72 |
|
Equity Share Capital |
9.98 |
9.98 |
9.98 |
9.98 |
9.98 |
0 |
0 |
|
Basic EPS |
4.76 |
2.59 |
3.65 |
3.86 |
1.58 |
201.27 |
83.78 |
|
Consumption of Raw Materials |
16.79 |
15.21 |
13.85 |
20.63 |
19.73 |
-14.9 |
10.39 |
|
Increase/Decrease in Stocks |
-0.83 |
-0.89 |
3.58 |
-1.34 |
-0.49 |
69.39 |
-6.74 |
|
Power & Fuel |
-- |
-- |
2.18 |
-- |
4.08 |
||
|
Employees Cost |
3.23 |
2.96 |
3.2 |
2.98 |
2.75 |
17.45 |
9.12 |
|
depreciat |
1.9 |
1.09 |
1.02 |
1.26 |
1.21 |
57.02 |
74.31 |
|
Other Expenses |
6.45 |
5.41 |
5.73 |
9.99 |
6.27 |
2.87 |
19.22 |
|
Total Expenditure |
27 |
23 |
29 |
33 |
33 |
-18.18 |
17.39 |
|
P/L Before Other Inc. , Int., Excpt. Items & Tax |
6.75 |
3.97 |
2.69 |
4.57 |
2.94 |
129.59 |
70.03 |
|
Other Income |
0.08 |
0.06 |
0.1 |
0.75 |
0.14 |
-42.86 |
33.33 |
|
P/L Before Int., Excpt. Items & Tax |
6.83 |
4.03 |
2.79 |
5.32 |
3.08 |
121.75 |
69.48 |
|
Interest |
0.06 |
0.04 |
0.17 |
0.21 |
0.19 |
-68.42 |
50 |
|
P/L Before Tax |
6.77 |
3.99 |
2.61 |
5.11 |
2.89 |
134.26 |
69.67 |
|
Tax |
2.03 |
1.41 |
-1.03 |
1.27 |
1.31 |
54.96 |
43.97 |
MP 180
PE(FV 10) 9.453781513
VOLUMES 8,983 NOT TRADED IN NSE FOR LAST 30 DAYS
52 Wk L/H 63.5 223
TECHNICAL ANALYSIS
DAILY AND WEEKLY BEARISH
MONTHLY BULLISH
|
Quarterly |
Sep-20 |
Jun-20 |
Mar-20 |
Dec-19 |
Sep-19 |
|
Sales |
34 |
27 |
32 |
38 |
36 |
|
Other Income |
0 |
0 |
0 |
0 |
0 |
|
Total Income |
34 |
27 |
32 |
38 |
36 |
|
Total Expenditure |
27 |
23 |
29 |
33 |
33 |
|
EBIT |
6 |
4 |
2 |
5 |
3 |
|
Interest |
0 |
0 |
0 |
0 |
0 |
|
Tax |
2 |
1 |
-1 |
1 |
1 |
|
Net Profit |
4 |
2 |
3 |
3 |
1 |
|
HISTORICAL PRICES |
|
|
3YRS BEF |
105.3 |
|
2YRS |
280 |
|
1YR |
116.8 |
|
3MONTHS |
211 |
|
1MONTH |
167 |
|
1WEEK |
174 |
|
NOW |
180 |
|
Annual Results |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Sales |
164 |
221 |
161 |
126 |
133 |
|
Other Income |
1 |
0 |
0 |
0 |
0 |
|
Total Income |
165 |
222 |
162 |
127 |
133 |
|
Total Expenditure |
143 |
177 |
146 |
117 |
126 |
|
EBIT |
22 |
44 |
15 |
9 |
7 |
|
Interest |
0 |
3 |
5 |
6 |
7 |
|
Tax |
4 |
5 |
0 |
0 |
0 |
|
Net Profit |
16 |
35 |
9 |
3 |
0 |
|
CASH FLOW |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Operating Activities |
21 |
36 |
17 |
15 |
16 |
|
Investing Activities |
-9 |
-2 |
0 |
0 |
0 |
|
Financing Activities |
-12 |
-33 |
-16 |
-14 |
-15 |
|
Others |
0 |
0 |
0 |
0 |
0 |
|
Net Cash Flow |
0 |
0 |
0 |
0 |
0 |
|
Per Share Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Basic EPS (Rs.) |
17.02 |
36.06 |
9.7 |
3.3 |
0.4 |
|
Diluted Eps (Rs.) |
17.02 |
36.06 |
9.7 |
3.3 |
0.4 |
|
Book Value [Excl. Reval Reserve]/Share (Rs.) |
65.36 |
48.15 |
12.67 |
3.26 |
0.06 |
|
Dividend/Share (Rs.) |
0 |
0 |
0 |
0 |
0 |
|
Face Value |
10 |
10 |
10 |
10 |
10 |
|
Margin Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Gross Profit Margin (%) |
16.44 |
23.76 |
12.79 |
11.56 |
6.41 |
|
Operating Margin (%) |
13.63 |
20.15 |
9.74 |
7.82 |
2.83 |
|
Net Profit Margin (%) |
10.29 |
16.22 |
5.97 |
2.6 |
0.3 |
|
Return Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Return on Networth / Equity (%) |
26.03 |
74.89 |
76.59 |
101.15 |
721.76 |
|
ROCE (%) |
31.85 |
74.71 |
79.17 |
98.59 |
7.18 |
|
Return On Assets (%) |
19.04 |
30.94 |
11.31 |
4.26 |
0.44 |
|
Liquidity Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Current Ratio (X) |
2.51 |
1.4 |
0.64 |
0.44 |
0.47 |
|
Quick Ratio (X) |
1.6 |
0.86 |
0.39 |
0.28 |
0.26 |
|
Leverage Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Debt to Equity (x) |
0.01 |
0.13 |
2.91 |
14.68 |
1,007.18 |
|
Interest Coverage Ratios (%) |
26.59 |
14.68 |
2.64 |
1.5 |
0.53 |
|
Turnover Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Asset Turnover Ratio (%) |
184.91 |
190.76 |
189.29 |
163.88 |
146.47 |
|
Inventory Turnover Ratio (X) |
9.7 |
7.32 |
9.58 |
11.65 |
7.45 |
|
Valuation Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
P/E (x) |
0 |
0 |
0 |
0 |
0 |
|
P/B (x) |
1.21 |
4.52 |
8.96 |
18.85 |
457.27 |
|
EV/EBITDA (x) |
2.93 |
4.32 |
7.56 |
7.86 |
10.06 |
|
P/S (x) |
0.48 |
0.98 |
0.7 |
0.49 |
0.19 |
|
Growth Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
3 Yr CAGR Sales (%) |
9.25 |
18.48 |
10.52 |
2.55 |
-2.92 |
|
3 Yr CAGR Net Profit (%) |
72.78 |
348.02 |
22.31 |
2.78 |
-67.21 |
STRENGTHS
Growth in Net Profit with increasing Profit Margin (QoQ)
Company with Low Debt
Book Value per share Improving for last 2 years
Company with Zero Promoter Pledge
WEAKNESSES
Companies with growing costs YoY for long term projects
Inefficient use of capital to generate profits - RoCE declining in the last 2 years
Inefficient use of shareholder funds - ROE declining in the last 2 years
De-growth in Revenue and Profit
Declining Net Cash Flow : Companies not able to generate net cash
OPPORTUNITIES
Companies with current TTM PE Ratio less than 3 Year, 5 Year and 10 Year PE
Negative to Positive growth in Sales and Profit with Strong Price momentum
Highest Recovery from 52 Week Low
