Camphor & Allied Products Ltd ( BSE Code: 500078/ not listed on NSE)

Industry: Terepene Chemistry

Products: fragrance chemicals & fragrance chemicals intermediates

User industries: Flavours & Fragrances, Soaps & Cosmetics, Pharma, Rubber & tyres, paints & varnishes

Equity Capital: 5.13 cr

Debt: 18.77 cr

Dividend: has not skipped dividend since the last 8 years

Camphor & Allied has 2 manufacturing plants : Baroda ( Gujarat ) & Bareilly (UP) besides a R&D set up set on a sprawling 20 acre complex in Baroda.

2008-09

 

Sales : 135 cr

 

PBT : 7.8 cr

 

NP : 3.7 cr

 

EPS : Rs.7.20

 

Dividend : Rs.1.50

 

 

 

2009-10 :

 

Sales : 166 cr

 

PBT : 16 cr

 

NP : 10.24 cr

 

EPS : Rs.19.95

 

Dividend : Rs.1.50

Promoter Company profile:

Oriental Aromatics, an unlisted, closely held company (they bought 32% from earlier promoters (Dalal's) @ 167 per share early 2008 & followed it up by buying 20% public shareholding at the same price.

Oriental Aromatics is promoted by Anil Bodani & operations are run by him and his two sons. It has a unit catering to domestic markets in Daman & an EOU in Mangalore. It manufactures fragrances & flavours for various end applications such as soaps/detergents, cosmetics, scented candles, packed foods, confectionery, pharma.
It has equity capital of 4 cr, approx revenue & np of approx 65 cr & 13 cr respectively in 2008. Net wroth a year back was approx 80 cr.

Anil Bodani is a trained perfumer who started his career in 1958 and sharpened his skills with Antoine de Chris SA, in France

Worldwide Flavour & Fragrance industry market is around USD 20 billion of which the top 3 (Givaudan sales : USD 3.9 billion/ 19% market share, Firmenich sales USD 2.5 billion, 12.2% market share, IFF : sales 2.4 USD , 11.8% market share) control about 43% market share. Another 30% is controlled by the next 7 companies. The top 3 have already set up India operations. Worldwide, though cut throat competition exists due to flattish sales since the last 2 years, the industry thrives on innovation.

Of the top 10 market shareholder, 5 are Europe based, 3 US based & the balance 2 from Japan
Though the world market has been shrinking, the Indian market has shown consistent growth and it is likely that other companies from the top may also look at Indian presence.

It must be noted that the above MNC's are much ahead in the value chain compared to Camphor & Allied as they manufature not only aromatic chemicals but also 'create/innovate' fragrances / flavours. It is however important to keep in mind that Oriental Aromatics has a strong franrance/flavour portfolio

At the current price of Rs.102 ( market cap: 52 cr), Camphor & Allied offers a fair investment opportunity.

p.s: I hold

Edited by jstk - 18/Jun/2010 at 2:48pm

Ohh I have missed this one. I thought it was de listed. Need to get it demated.

Why is it even paying a dividend when it can use that money to pay off debt?

my basis of investment is that the Indian perfumery market is at a very nascent stage but  set for significant growth at a rate faster than GDP.

Camphor & Allied is the only listed company largely focussed on Aromatic chemicals ( used in flavours / fragrances ) of different varieties. It's parent, Oriental Aromatics  is a well known exporter of flavours & fragrances to some of the best known brands worldwide.

most of the top 10 worldwide  flavours & fragrances companies have set up shop in india for production . So the overall market for aromatic chemicals will show steady growth over the next few years and Camphor & Allied will reap good dividends from the same.