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videos | IST

Moneycontrol Pro: Fine Organic Industries in focus, here’s why

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In the special segment of ‘Moneycontrol Pro Ideas For Profit’, Moneycontrol.com’s Anubhav Sahu gets more details on the Fine Organic Industries' performance.

Sharing a few ideas for profit from Moneycontrol Pro, Anubhav Sahu of Moneycontrol.com spoke about a stock that he is tracking closely, Fine Organic Industries.
Fine Organic is a leading producer of specialty additives for food, plastic, rubber, paint, ink, cosmetics, coatings, textile auxiliaries, lubes and several other specialty applications. While such additives have demand in the areas of direct consumption, such as food, nutrition and pharma, sectors like cosmetics and plastics are also adding decent acceptability. Now in this context, Fine Organic is an interesting stock as both recovery as well as sustainability is seen.
It is the largest manufacturer of oleochemicals-based additives in India. The company has a manufacturing capacity of more than 1 lakh tonne which has seen a significant rise compared to its 54,000-tonne capacity three years back.
Also, the company is on track to add 10,000 tonne food additives by the end of FY22.
The company is also evaluating both organic and inorganic opportunities, taking advantage of strong balance sheets.
The near-term challenges are the estimated reopening of global sales and elevated raw material prices. 30 percent of the raw materials are imported and particularly, palm-based oil prices are impacted in Indonesia and Malaysia due to the pandemic.
We believe this is a short-term pain and EBITDA margins should eventually grow to about 70 percent by the end of FY22.
Watch the video for more
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