StockEdge.com
  • Products
    • StockEdge Premium
    • StockEdge Pro
    • StockEdge Club
    • Compare Plans
StockEdge Blog
  • Trending Stocks
  • Insights
    • All
    • Business Houses
    • Markets themes
    • Stock Insights
    Top performing blue chip stocks to buy and invest in 2023

    Top 5 Blue Chip Stocks to Buy and Invest in 2023

    Adani Enterprises FPO: Detailed Analysis, GMP and Review?

    Adani Enterprises FPO: Detailed Analysis, GMP and Review?

    Top 5 Defence Stocks to Invest in India

    Top 5 Defence Stocks to Invest in India

    Top 5 Stocks to Look for in 2023

    Top 5 Stocks to Look for in 2023

    Cochin Shipyard – A strong defense play for India

    Cochin Shipyard – A strong defense play for India

    Avanti Feeds – Shrimply Irresistible

    Avanti Feeds – Shrimply Irresistible

    Gati Ltd. – Can it ride the Logistic Industry’s Tailwinds?

    Gati Ltd. – Can it ride the Logistic Industry’s Tailwinds?

    Atul Auto: A Curious Case of Value Investing

    Atul Auto: A Curious Case of Value Investing

    Dalmia Bharat Ltd. – Building the nation brick by brick

    Dalmia Bharat Ltd. – Building the nation brick by brick

  • Technical Analysis
    Chart Patterns – Unique Blend of Human & Artificial Intelligence

    Chart Patterns – Unique Blend of Human & Artificial Intelligence

    StockEdge Version Update : 9.0

    StockEdge Version Update : 9.0

    SE Blog- How to beat the street with Sector Rotation Strategy.

    SE Blog- How to beat the street with Sector Rotation Strategy.

    StockEdge Version Update 8.2

    StockEdge Version Update 8.2

    Derivative Analytics

    An Insightful Research Tool For Derivative Analytics

    Introducing Put-Call Ratio a Derivative Indicator in the Market

    Introducing Put-Call Ratio a Derivative Indicator in the Market

    A Powerful Technical Indicator Beta & Beta Scans

    A Powerful Technical Indicator Beta & Beta Scans

    Technical Analysis using Edge Charts

    Technical Analysis using Edge Charts

    What is Adaptive Relative Strength & Static Relative Strength Scans?

    What is Adaptive Relative Strength & Static Relative Strength Scans?

  • Fundamental Analysis
    • All
    • Cash Flow Ratios
    • Efficiency ratios
    • Growth Ratios
    • Liquidity Ratios
    • Return Ratios
    • Solvency ratios
    • Valuation Ratios
    StockEdge Version Update 8.2

    StockEdge Version Update 8.2

    Understanding the Importance of creating Fundamental Scans

    Understanding the Importance of creating Fundamental Scans

    Using My Combination Scan to Identify best in an Industry

    Using My Combination Scan to Identify best in an Industry

    Cost Income ratio

    Cost to Income Ratio(%)

    Cost of Liability

    Cost of Liabilities (%)

    Operating Cost to Assets Ratio (%)

    Operating Cost to Assets Ratio (%)

  • StockEdge Tutorials
    Chart Patterns – Unique Blend of Human & Artificial Intelligence

    Chart Patterns – Unique Blend of Human & Artificial Intelligence

    StockEdge Version Update : 9.0

    StockEdge Version Update : 9.0

    Powerful Investment Themes for Retail Investors

    Powerful Investment Themes for Retail Investors

    SE Blog- How to beat the street with Sector Rotation Strategy.

    SE Blog- How to beat the street with Sector Rotation Strategy.

    StockEdge Version Update 8.3

    StockEdge Version Update 8.3

    StockEdge Version Update 8.2

    StockEdge Version Update 8.2

    Using Investor Portfolios Section to track Big Bulls like Rakesh Jhunjhunwala

    Using Investor Portfolios Section to track Big Bulls like Rakesh Jhunjhunwala

    StockEdge Version 8.1 – It keeps getting Better & Better

    StockEdge Version 8.1 – It keeps getting Better & Better

    StockEdge Version Update 8.0 – Like never before

    StockEdge Version Update 8.0 – Like never before

  • Mutual Fund
    Top 5 Mutual Funds for 2022 where you can start your SIP

    Top 5 Mutual Funds for 2022 where you can start your SIP

    What are Value Funds and its Advantages?

    What are Value Funds and its Advantages?

    A Beginners Guide to Thematic Funds

    A Beginners Guide to Thematic Funds

    Understanding Sector Funds and their Benefits to our Portfolio

    Understanding Sector Funds and their Benefits to our Portfolio

    Are Dividend Yield Funds a good option to invest in?

    Are Dividend Yield Funds a good option to invest in?

    What are Contra Funds and their advantages?

    What are Contra Funds and their advantages?

    Trending Tags

    No Result
    View All Result
    • Trending Stocks
    • Insights
      • All
      • Business Houses
      • Markets themes
      • Stock Insights
      Top performing blue chip stocks to buy and invest in 2023

      Top 5 Blue Chip Stocks to Buy and Invest in 2023

      Adani Enterprises FPO: Detailed Analysis, GMP and Review?

      Adani Enterprises FPO: Detailed Analysis, GMP and Review?

      Top 5 Defence Stocks to Invest in India

      Top 5 Defence Stocks to Invest in India

      Top 5 Stocks to Look for in 2023

      Top 5 Stocks to Look for in 2023

      Cochin Shipyard – A strong defense play for India

      Cochin Shipyard – A strong defense play for India

      Avanti Feeds – Shrimply Irresistible

      Avanti Feeds – Shrimply Irresistible

      Gati Ltd. – Can it ride the Logistic Industry’s Tailwinds?

      Gati Ltd. – Can it ride the Logistic Industry’s Tailwinds?

      Atul Auto: A Curious Case of Value Investing

      Atul Auto: A Curious Case of Value Investing

      Dalmia Bharat Ltd. – Building the nation brick by brick

      Dalmia Bharat Ltd. – Building the nation brick by brick

    • Technical Analysis
      Chart Patterns – Unique Blend of Human & Artificial Intelligence

      Chart Patterns – Unique Blend of Human & Artificial Intelligence

      StockEdge Version Update : 9.0

      StockEdge Version Update : 9.0

      SE Blog- How to beat the street with Sector Rotation Strategy.

      SE Blog- How to beat the street with Sector Rotation Strategy.

      StockEdge Version Update 8.2

      StockEdge Version Update 8.2

      Derivative Analytics

      An Insightful Research Tool For Derivative Analytics

      Introducing Put-Call Ratio a Derivative Indicator in the Market

      Introducing Put-Call Ratio a Derivative Indicator in the Market

      A Powerful Technical Indicator Beta & Beta Scans

      A Powerful Technical Indicator Beta & Beta Scans

      Technical Analysis using Edge Charts

      Technical Analysis using Edge Charts

      What is Adaptive Relative Strength & Static Relative Strength Scans?

      What is Adaptive Relative Strength & Static Relative Strength Scans?

    • Fundamental Analysis
      • All
      • Cash Flow Ratios
      • Efficiency ratios
      • Growth Ratios
      • Liquidity Ratios
      • Return Ratios
      • Solvency ratios
      • Valuation Ratios
      StockEdge Version Update 8.2

      StockEdge Version Update 8.2

      Understanding the Importance of creating Fundamental Scans

      Understanding the Importance of creating Fundamental Scans

      Using My Combination Scan to Identify best in an Industry

      Using My Combination Scan to Identify best in an Industry

      Cost Income ratio

      Cost to Income Ratio(%)

      Cost of Liability

      Cost of Liabilities (%)

      Operating Cost to Assets Ratio (%)

      Operating Cost to Assets Ratio (%)

    • StockEdge Tutorials
      Chart Patterns – Unique Blend of Human & Artificial Intelligence

      Chart Patterns – Unique Blend of Human & Artificial Intelligence

      StockEdge Version Update : 9.0

      StockEdge Version Update : 9.0

      Powerful Investment Themes for Retail Investors

      Powerful Investment Themes for Retail Investors

      SE Blog- How to beat the street with Sector Rotation Strategy.

      SE Blog- How to beat the street with Sector Rotation Strategy.

      StockEdge Version Update 8.3

      StockEdge Version Update 8.3

      StockEdge Version Update 8.2

      StockEdge Version Update 8.2

      Using Investor Portfolios Section to track Big Bulls like Rakesh Jhunjhunwala

      Using Investor Portfolios Section to track Big Bulls like Rakesh Jhunjhunwala

      StockEdge Version 8.1 – It keeps getting Better & Better

      StockEdge Version 8.1 – It keeps getting Better & Better

      StockEdge Version Update 8.0 – Like never before

      StockEdge Version Update 8.0 – Like never before

    • Mutual Fund
      Top 5 Mutual Funds for 2022 where you can start your SIP

      Top 5 Mutual Funds for 2022 where you can start your SIP

      What are Value Funds and its Advantages?

      What are Value Funds and its Advantages?

      A Beginners Guide to Thematic Funds

      A Beginners Guide to Thematic Funds

      Understanding Sector Funds and their Benefits to our Portfolio

      Understanding Sector Funds and their Benefits to our Portfolio

      Are Dividend Yield Funds a good option to invest in?

      Are Dividend Yield Funds a good option to invest in?

      What are Contra Funds and their advantages?

      What are Contra Funds and their advantages?

      Trending Tags

      No Result
      View All Result
      StockEdge Blog
      Home Insights
      Apcotex Industries Ltd. – Strong Fundamentals & a Market Leader

      Apcotex Industries Ltd. – Strong Fundamentals & a Market Leader

      StockEdge by StockEdge
      August 29, 2022
      Reading Time: 7 mins read
      18.6k
      VIEWS
      Share on FacebookShare on TwitterShare On WhatsApp

      Table of Contents

      • The Story
      • Let us simplify their business model for a better understanding!
      • What are the entry barriers in the field of speciality emulsion polymers?
      • Let’s look at the Financial Performance of Apcotex Industries.
      • To get more detailed analysis and Reports on Stocks, visit our Edge Report Section by subscribing to our StockEdge premium plans.
      • How good is the jockey?
      • Road Ahead…

       

      Subscribe To StockEdge Club Subscribe To StockEdge Club Subscribe To StockEdge Club

      Among other trending stocks, today we will discuss Apcotex Industries Ltd., which is currently trading within its 52-week high zone, and its relative strength is increasing with respect to its benchmark and sectoral index.

      The Story

      Incorporated in 1986, Apcotex is one of the leading producers of Synthetic Rubber (NBR & HSR) and Synthetic Latex (Nitrile, VP latex, XSB & Acrylic latex) in India. As a result, the company has one of the broadest ranges of Emulsion Polymers available today. The company’s primary raw materials are Butadiene, Acrylonitrile and Styrene, which are petrochemical-based products. Apcotex has a plant in Taloja, Maharashtra, for Synthetic Latex and High Styrene Rubber (HSR). Another plant is in Valia, Gujarat, acquired from Omnova for Nitrile Butadiene Rubber (NBR) and High Styrene Rubber.

      Apcotex was started as a division of Asian Paints in 1980. It was spun off as a separate company in 1991 as Apcotex Lattices Ltd. It changed its name from “Apcotex Lattices Ltd” to “Apcotex Industries Ltd” in June 2005.  

      They have built a strong R&D foundation over the years, allowing the company to develop, manufacture, and export products while competing against global players such as BASF and Dow Chemicals. Furthermore, they offer value-added services that allow customers to improve the quality of their final product by utilising Apcotex’s service team and application laboratory. In the speciality chemicals industry, the value-added service is a key differentiator for the company.

      They sell different protective coating agents under the brand name ApcoBuild.

      Apcotex faces significant risks in sourcing two primary raw materials — styrene and butadiene, downstream petrochemical products. Styrene is not manufactured in India, so the company imports it. Butadiene has only two manufacturers in the country, IndianOil Corporation and Reliance Industries.

      Let us simplify their business model for a better understanding!

      Apcotex Industries

      Apcotex Industries has been into two business verticals. (i) Synthetic Latex (ii) Synthetic Rubber. The company has various kinds of latex: VP latex, Carboxylated latex, SB latex, and Nitrile latex under the synthetic latex segment. In addition, these different latexes have been catered to other industries such as Auto, Paper, Construction, Carpet, and Textile which has the application of binding. The key properties of Synthetic latex are resisting heat ageing, abrasion resistance and softening. Clients include:- ITC, Asian Paints, Ultratech Cement, Welspun, BILT, JK PAPER, Pidilite Industries, MRF, SRF, Century Enka etc.

      Under synthetic rubber, they have been manufacturing High styrene rubber (HSR). The High styrene rubber is suitable for the manufacture of high-hardness and low-density products. It has been used for Shoe-making, Electrical insulating material, Floor materials: rubber floor tile, industrial products like rubber roll, washers, hard rubber tubes and other sponge products, Sports industry: balls, roller skates. In contrast, NBR products find application in automotive components, rice de-husking rolls, rubber hoses, moulded rubber products, and other industrial products. Clients include:- Paragon Footwear, Jayshree Polymers, Parker Hannifin, Gates India, Armacell, Supreme Industries etc.

      Over the years, they have evolved its product profile from a synthetic rubber manufacturer to a polymer specialist.

      What are the entry barriers in the field of speciality emulsion polymers?

      Producing emulsion polymers at a Large scale with consistent performance is a complex task. Apcotex offers different grades of synthetic latexes to meet the needs of its customers. Obtaining the necessary stability and consistency in speciality chemicals is time-consuming (manufacturing processes sometimes take years to stabilize).

      Apcotex has achieved this criticality through years of R&D and has successfully demonstrated its ability to compete with its most significant chemical manufacturers. Technology and process criticality are long-term entry barriers in this industry.

      Another critical aspect of the technology is polymer purity: Inorganic chemicals, such as soda ash and sodium hydroxide, are composed of very small molecules and, as a result, are less susceptible to contamination in the molecular structure during production than polymers. Polymer molecules are made up of thousands of atoms linked in a repeating pattern. A minor impurity in the molecule during the manufacturing process can significantly impact its physical and chemical properties. Other technical entry barriers include a production facility and the know-how to maintain a world-class facility.

      Extended sales cycles: Sales cycles in the speciality chemicals industry are typically quite long. Gaining customer trust takes quite some time. Thus, the payback period for these products is thus extended.

      Raw Material Handling: Butadiene, a volatile compound, is one of the critical raw materials used in the production of synthetic latexes. It is extremely flammable. Exposure to air and other gases can result in fires, explosions, or dangerous polymerisation. Butadiene is typically stored in tight cylinders at a temperature of around 10 degrees Celsius in a cool, dry, and ventilated location to avoid exposure to heat, air, or other oxidizing agents.

      Let’s look at the Financial Performance of Apcotex Industries.

      Apcotex Industries

      Apcotex Industries‘ reported the highest-ever quarterly top-line. They have been operating at full capacities since last quarter & therefore the growth came from increase in realisation. The revenue for Q1FY23 increased by 64% YoY & 10.5% QoQ to Rs.306 cr. As a result, the company reported EBITDA of Rs 48.5 Cr, up 61% YoY and 7% QoQ. EBITDA Margin was 17% on account of inventory gains and PAT stood at Rs 33.6 Cr.

      Apcotex Industries

      To get more detailed analysis and Reports on Stocks, visit our Edge Report Section by subscribing to our StockEdge premium plans.

      How good is the jockey?

      Atul Choksey (son of Champaklal H. Choksey, one of the founders of Asian paints) has been the company’s Chairman for almost two decades. From 2005, Mr Abhiraj Choksey, son of Atul Choksey, was the Executive Director and in May 2010, he was appointed the Managing Director of the Company. He studied Bachelor of Science at the University of Pennsylvania, majoring in Engineering and Economics. In addition, he is a Bachelor of Science in Economics from Wharton Business School.

      Road Ahead…

      ApcoBuild, their product, has expanded its presence in existing geographies by adding new towns and villages in Maharashtra, Goa, and Gujarat. ApcoBuild is expected to contribute 10-15% to the top line in the next 2-3 years, according to management. The primary focus here is on product quality and positioning in the niche segment of leakages and water proofing, which will yield the best long-term results for the business.

      Demand is expected to remain strong, but prices are softening in both international and domestic markets. The company currently holds the market leader position in almost all of its products and is expected to gain market share once the new capacities are operational.

      Apcotex intends to concentrate on commercialising its new facilities in Taloja and Valia; the ramp-up period is expected to last 2-3 quarters from the date of commissioning. Furthermore, the company is focusing on ApcoBuild with a target market in Western India and expects this segment to perform well in the future.

      The company is expected to do well in the future, with high growth expectations in some of the key end-user industries, a focus on the capacity expansion plan, increasing the share of the company’s exports in the gloves and carpet segment, and a focus on further increasing market share and product portfolio expansion (XNBR Latex).

      Due to its product placement and judicious customer selection, high gripping demand from customers, and planned cost-cutting efforts, management expects to maintain its EBITDA margin in the range of 14%-16%. The company expects to maintain/grow its key operational metric of EBITDA/ton, with top-line growth beginning in Q1 FY24 as new capacities sweat.

      However, as with such companies, risks like uncertainties caused by the geopolitical tensions, high inflation in the global economy & decision on anti-dumping of NBR could affect the company’s performance.

      So we will have to wait and see how Apcotex Industries develops from here on out.

      Until then, keep an eye out for the next blog and our midweek and weekend editions of “Trending Stocks and Stock Insights.” Also, please share it with your friends and family.

      Happy Investing!

      Tags: Apcotex Industries Ltd.asian paintsstock insights
      ShareTweetSend
      Subscribe On Telegram Subscribe On Telegram Subscribe On Telegram
      Previous Post

      2 stocks from Auto Sector with strong growth momentum

      Next Post

      StockEdge Version Update 8.2

      StockEdge

      StockEdge

      StockEdge is a self-help Equity and Mutual Fund research tool. It empowers retail investors to identify investment opportunity with all the necessary data and analytics.

      Next Post
      StockEdge Version Update 8.2

      StockEdge Version Update 8.2

      How is KEI Industries powering growth?

      How is KEI Industries powering growth?

      How is Varun Beverages getting its fizz back?

      How is Varun Beverages getting its fizz back?

      Comments 1

      1. YUSUF H VALIKARIMWALA says:
        4 months ago

        Excellent stock survey.

        Reply

      Leave a Reply Cancel reply

      Your email address will not be published. Required fields are marked *

      Contact Us
      • Timing (Mon-Sat): 10 am to 7 pm
      • Sales: +919830994463
      • Support: +919830994402
      • Club Support: +916289906895
      • Affiliate: +917003567131
      Recent Posts
      Top performing blue chip stocks to buy and invest in 2023
      Top 5 Blue Chip Stocks to Buy and Invest in 2023
      Adani Enterprises FPO: Detailed Analysis, GMP and Review?
      Important Links
      • StockEdge.com
      • StockEdge Premium
      • - Quarterly Membership
      • - Annual Membership
      • StockEdge Analyst
      • StockEdge Club
      • Compare Plans
      An Initiative Of

      © 2023 Kredent InfoEdge Pvt Ltd.

      Facebook-f Twitter Instagram Linkedin-in Youtube Pinterest-p

      Get StockEdge App

      No Result
      View All Result
      • Home
      • Article Categories
        • Fundamental Analysis
        • Technical Analysis
        • Market Themes
        • StockEdge Tutorials
        • StockEdge Version Updates
      • Products
        • StockEdge Premium
        • StockEdge Pro
        • StockEdge Club
        • Compare Plans
      • Visit StockEdge.com

      © 2023 Kredent InfoEdge Pvt Ltd.