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Based out of Vadodara, Guajarat, INEOS Styrolution (formerly known as Styrolution ABS) is a producer of Absolac (for the Automotive Industry) and Absolan (for Lightings, Stationeries & Novelties, and Refrigerators & Cosmetic Packing).
In simple terms, INEOS Styrolution is a global styrenics supplier with a focus on styrene monomer, polystyrene, ABS Standard and styrenic specialties.
The company provides products required by other industries which include construction, automotive, modern household products, electronics industry, packaging and healthcare and many more.
INEOS has 4 manufacturing facilities located in Gujarat with one each at Nandersari, Katol and Moxi and Dahej.
INEOS competes with Bhansali Engineering [which is ramping up its production by the end of the current financial year along with an additional capacity near Kandla in another 4 years] in this space with both together cornering close to 80% of the market. The remaining 20% of the market is fulfilled by imports.
INEOS capacity stands at 80,000 tonnes of ABS, 100,000 tonnes of SAN and 78,000 tonnes of Polystyrene while the market demand is close to 200,000 tonnes for ABS, 50,000 tonnes for SAN and 270,000 tonnes for Polystyrene.
INEOS ended 2016-17 with a Revenue of Rs. 1673.25 crore against Rs. 1778.08 crore and a PAT of Rs. 69.27 crore against Rs. 63.83 crore.
INEOS reported the healthy profit on the back of recovering demand from the demonetization impact, better pricing and improvement in margins though the raw materials witnessed price increase in the range of 50-100% [especially crude and Benzene]. 2-Aug-17 is the Ex-Date for the dividend of Rs. 4/- annouced for the year 2016-17.
On the other end, BEPL closed 2016-17 with a Revenue of Rs. 712.52 crore against Rs. 596.79 crore and a PAT of Rs. 34.77 crore against Rs. 16.68 crore. BEPL announced its Q1 results for the period ending June, 2017 with Revenue of Rs. 251 crore against Rs. 165.24 crore during the same quarter last year. PAT stood at 16.88 crore against Rs. 8 crore.
The stock has been strongly bullish with new highs being reached. This is also supported by Volume which provides a much better foundation than price alone.
NOTE: Please do not consider this article as a recommendation, It is purely for informative purpose only. Authors may have positions in the stocks mentioned, so consider our analysis biased. There is no commercial relationship between Capitalmind and the companies mentioned in this analysis.