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Fairchem Organics
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Fairchem Organics Limited was incorporated as a Public Limited Company on March 27, 2019. The Company is mainly in manufacturing of speciality chemicals like Oleo Chemicals and Intermediate Nutraceuticals. The manufacturing facility is set up at Village Chekhala, Ta. Sanand, Dist. Ahmedabad, Gujarat, India.
Fairchem has perfected the business model of procuring waste generated in the oil refining mills and then using state of the art process equipment to isolate and purify a variety of components from the waste. Some of these components are used as building blocks to make further value-added products like Dimer acid. Fairchem is India's only manufacturer of Dimer acid used in many consumer products including paints, printing inks, epoxy hardeners, drilling chemicals and moulds. The Company also processes Tocopherol which is used in formulating Natural Vitamin-E.
The Company tracks the import data from China as Chinese suppliers are main competitors for the Company. Based on analysis, the Company continues to maintain leadership position in Indian market by its pricing strategy, timely service, quick supply and fair terms of payment and quality product. Dimer Acid is a value added product of the Company which is derived as one of the streams by further processing Linoleic Acid.
Dimer Acid is used for making two kinds of polyamides i.e. Non-reactive and reactive. Non-reactive polyamides are used by manufacturers of printing inks, adhesives, paper coatings etc. Rising demand from industries such as printing inks, adhesives and paper coatings may drive global dimer acid market size for non-reactive polyamide resins. The demand for Reactive polyamide resins application will be driven by increasing surface coatings & adhesives demand in marine and construction. The end use of both - Linoleic Acid and Soya Fatty Acid - is same i.e. for making Alkyd Resins which in turn is used in making paints.
In 1996, the Company started producing mixed tocopherol concentrate. In 2002, the Company started making Dimer Acid and Monobasic Acid. In 2013, the raw material throughput capacity was increased to 18000 MTPA. In 2014, the raw material throughput capacity increased to 24000 MTPA and the Company undertook Capex to increase this capacity to 45000 MTPA. In 2016, the Company increased raw material capacity to 45000 MT.
The Board of Directors of the Company, in its meeting held on May 22, 2019, had approved a Composite Scheme of Arrangement and Amalgamation amongst Fairchem Speciality Limited (FSL), Fairchem Organics Limited (FOL) and Privi Organics India Limited (POIL), two wholly owned subsidiaries of FSL and their respective shareholders for Demerger of FSL's undertaking carrying on speciality oleo chemicals and nutraceuticals business and vesting the same into FOL and Amalgamation of POIL, manufacturers of aroma chemicals, into and with FSL, under Sections 230 to 232 read with Section 66 and other applicable provisions of the Companies Act, 2013. National Company Law Tribunal (NCLT) has sanctioned the Scheme on June 30, 2020. The Company received Certified Copy of the Scheme on August 3, 2020. The said Scheme has been adopted by the Board of Directors of FSL, FOL and POIL in their meeting held on August 12, 2020. As a consequence, the Scheme has been made effective with effect from August 12, 2020.
During the year 2020, the Company issued 1,30,20,902 Equity Shares of Rs. 10/- each fully paid up to shareholders of Fairchem Speciality Limited (FSL) on August 24, 2020. These Equity Shares were issued pursuant to the Order dated June 30, 2020 of Hon'ble N.C.L.T., Mumbai Bench, inter alia, sanctioning the Composite Scheme of Arrangement and Amalgamation between the Company, FSL and Privi Organics India Limited. Further, pursuant to the said Scheme, the then existing paid up equity share capital of Rs. 1,00,000/- held entirely by FSL and its nominees was cancelled.
In 2021, the Company expanded raw material capacity from 45000 MTPA to 72000 MTPA.
Fairchem Organics share price reflects investor sentiment toward the company and is impacted by various factors such as financial performance, market trends, and economic conditions. Share price is an indicator which shows the current value of the company's shares at which buyers or sellers can transact.
Market capitalization of Fairchem Organics indicates the total value of its outstanding shares. Marketcap is calculated by multiplying share price and outstanding shares of the company. It is a helpful metric for assessing the company's size and market Valuation. It also helps investors understand how Fairchem Organics is valued compared to its competitors.
Fairchem Organics PE ratio helps investors understand what is the market value of each stock compared to Fairchem Organics 's earnings. A PE ratio higher than the average industry PE could indicate an overvaluation of the stock, whereas a lower PE compared to the average industry PE could indicate an undervaluation.
The PEG ratio of Fairchem Organics evaluates its PE ratio in relation to its growth rate. A PEG ratio of 1 indicates a fair value, a PEG ratio of less than 1 indicates undervaluation, and a PEG ratio of more than 1 indicates overvaluation.
Return on Equity (ROE) measures how effectively Fairchem Organics generates profit from shareholders' equity. A higher ROE of more than 20% indicates better financial performance in terms of profitability.
Return on Capital Employed (ROCE) evaluates the profitability of Fairchem Organics in relation to its capital employed. In simple terms, ROCE provides insight to investors as to how well the company is utilizing the capital deployed. A high ROCE of more than 20% shows that the business is making profitable use of its capital.
Total debt of Fairchem Organics shows how much the company owes to either banks or individual creditors. In simple terms, this is the amount the company has to repay. Total debt can be a very useful metric to show the financial health of the company. Total debt more than equity is considered to be a bad sign.
The Debt-to-Equity (DE) ratio of Fairchem Organics compares its total debt to shareholders' equity. A higher Debt to Equity ratio could indicate higher financial risk, while a lower ratio suggests that the company is managing its debt efficiently.
CAGR shows the consistent growth rate of Fairchem Organics over a specific period, whether it is over a month, a year, or 10 years. It is a key metric to evaluate the company’s long-term growth potential. Main metrics for which CAGR is calculated are net sales, net profit, operating profit, and stock returns.
Technical analysis of Fairchem Organics helps investors get an insight into when they can enter or exit the stock. Key components of Fairchem Organics Technical Analysis include:
There are usually multiple support levels, but the main support levels for a stock are S1, S2, S3. Support levels indicate price points where stock might get support from buyers, helping the stock stop falling and rise.
There are usually multiple resistance levels, but the main resistance levels for a stock are R1, R2, R3. Resistance levels represent price points where Fairchem Organics shares often struggle to rise above due to selling pressure.
Dividends refer to the portion of the company’s profits distributed to its shareholders. Dividends are typically paid out in cash and reflect Fairchem Organics ’s financial health and profitability.
Bonus shares are usually given by companies to make the stock more affordable, increase liquidity, boost investor confidence, and more.
Stock split increases the number of its outstanding shares by dividing each existing share into multiple shares. When the company offers a stock split, the face value of the stock reduces in the same proportion as the split ratio.
The financials of Fairchem Organics provide a complete view to investors about its net sales, net profit, operating profits, expenses, and overall financial health. Investors can analyze financial data to assess the company’s stability and also understand how the company has been growing financially.
The profit and loss statement of Fairchem Organics highlights its net sales, net profit, total expenditure, and operating profits in the current financial year. This Profit and Loss statement is crucial for evaluating the profitability and financial stability of Fairchem Organics .
The balance sheet presents a snapshot of Fairchem Organics ’s assets, liabilities, and equity of shareholders, providing insights into the financials of the company.
Cashflow statements track the company's cash inflows and outflows over a period. It is an essential tool for understanding how well the company manages its liquidity and finances.
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