Today I picked up Dhanuka Agritech Ltd. It "manufactures a wide range of agro-chemicals like herbicides, insecticides, fungicides, miticides, plant growth regulators in various forms – liquid, dust, powder and granules. The Company has a pan-India presence through its marketing offices in all major states in India, with a network of more than 7,000 distributors/ dealers"
Over the years the company has had a good steady growth of around 15% in top-line and 25% in bottom-line. The company introduces new brands and products each year, and has many technical tie-ups with international companies like Nissan, DuPont, Dow, FMC etc.
The interesting thing in the company's 2013 annual report was its expansion plan:
Your Company has bought 10 acres of land at Keshwana in Rajasthan for setting up a new manufacturing unit of International standards with maximum automation. The expected capex is to the tune of Rs.45-50 crores. The unit is expected to be operational by 2014 and will triple the existing manufacturing capacity.
Your Company has been allotted approx. 1,50,000 sq.mtr. Industrial plot in Dahej, which is a Chemical zone in Gujarat, for future expansion.
This would help your Company to achieve its objective of robust growth.
Historically the company has had a very good asset-turnover ratio (with sales of 646 crores on the net block of just 40 crores). The reason has been the 'formulation' manufacturing:
'Formulation' manufacturers: These are manufacturers of final product from technical grade pesticides (the usable form of pesticides). This is quite an asset light model and serves mostly B2C segment.
The above expansion can be a big trigger if the capacities are utilized. The company has also signed Amitabh Bachan as its brand ambassador recently. This too may provide a good growth going forward.
The company's current market capitalization is 675 crores. The business has a good ROE of over 25%, but the stock price is 2.5 times its book value. The major risk is the company's import exposure of more than 30 percent of its raw material costs. It will be interesting to see if the company is able to pass on the recent rupee depreciation in its price sensitive market.
CRISIL's report has reported the company as fairly valued at the current levels.
Regarding Ashiana Housing's value of constructed area, I couldn't find the details regarding it in the given reports. Will try to send a mail regarding it to the company.