Bodal Chemicals Stock Soars 15% After Government Imposes Anti-Dumping Duty on TCCA Imports
Bodal Chemicals Ltd witnessed a significant surge of up to 15% in its stock price after the Ministry of Finance imposed an anti-dumping duty on imports of Trichloro Isocyanuric Acid (TCCA) from China and Japan. This move is expected to boost the company’s revenue and strengthen its position as the sole producer of TCCA in India.
Stock Price Movement
The stock of Bodal Chemicals Ltd, which has a market capitalization of ₹833 crore, was trading at ₹66.1 per share, registering a 10.32% increase from the previous closing price of ₹56.70. This upward momentum followed the government’s decision to curb the influx of low-cost TCCA imports.
| Market Data | Value |
|---|---|
| Market Cap | ₹833 Cr. |
| Current Price | ₹66.1 |
| 52-Week High / Low | ₹97.2 / ₹49.6 |
| Stock P/E | 121 |
| Book Value | ₹86.0 |
| Dividend Yield | 0.00% |
| Promoter Holding | 57.3% |
Why Did the Stock Rise?
The Ministry of Finance imposed an anti-dumping duty on imports of TCCA under tariff items 2933 69 10 or 2933 69 90 of the First Schedule to the Customs Tariff Act, 1975. This duty, effective for the next five years from March 7, 2025, aims to curb cheap imports from China and Japan, ensuring fair market competition.
Bodal Chemicals is the only producer of TCCA in India, manufacturing it at its Unit 11 plant in Neja, Khambhat. This regulatory protection is expected to add approximately ₹50-₹60 crore annually to the company’s revenue starting from the financial year 2025-26, positively impacting its bottom line.
Financial Performance and Ratios
Bodal Chemicals reported a robust 31% revenue growth in Q3FY25, surging from ₹338.55 crore in Q3FY24 to ₹443.47 crore. Net profit skyrocketed by 453%, increasing from ₹0.98 crore to ₹5.42 crore.
| Financial Metric | Value |
|---|---|
| Revenue Growth (YoY) | 31% |
| Net Profit Growth (YoY) | 453% |
| EBITDA Margin | 10.4% (expected to improve) |
| Debt to Equity Ratio | 0.77 |
| Industry P/E Ratio | 22.8 |
| Stock P/E Ratio | 114 (Overvalued) |
| ROCE (Return on Capital Employed) | 3.46% |
| ROE (Return on Equity) | 1.13% |
| EPS (Earnings Per Share) | ₹0.48 |
| Intrinsic Value | ₹18.2 |
| PEG Ratio | -3.14 |
| Price to Book Value | 0.80 |
Valuation Analysis
- The P/E ratio of 114 is significantly higher than the industry average of 22.8, suggesting that the stock is overvalued.
- The debt-to-equity ratio of 0.77 indicates a moderate level of debt but is still within acceptable limits.
- EBITDA margins, currently at 10.4%, are projected to improve to 13% as revenue reaches ₹1,000 crore.
Growth Projections & Market Outlook
Revenue & Profitability Expectations
- Topline target: Management aims for ₹2,000 crore in revenue annually.
- EBITDA growth: Expected to reach 12%-15% in upcoming quarters.
- Capex plans: No major capital expenditure is planned for the next 4-6 quarters; focus remains on operational efficiency.
Impact of Anti-Dumping Duty
With the anti-dumping duty in place, Bodal Chemicals will have a competitive advantage in the TCCA market, allowing for higher pricing power and improved margins.
Company Overview
Bodal Chemicals Limited is one of India’s leading integrated Dyestuff companies, specializing in Dye Intermediates, Basic Chemicals, and Dyestuffs. The company serves both domestic and international markets, positioning itself as a key player in the Indian chemical industry.
FAQs (Frequently Asked Questions)
1. Why did Bodal Chemicals’ stock price increase by 15%?
The stock surged after the Ministry of Finance imposed an anti-dumping duty on TCCA imports from China and Japan, benefiting Bodal Chemicals as India’s only TCCA producer.
2. What is Trichloro Isocyanuric Acid (TCCA)?
TCCA is a chlorine-based disinfectant widely used in water treatment, swimming pools, and industrial cleaning applications.
3. How much additional revenue is expected due to the anti-dumping duty?
Bodal Chemicals anticipates an additional ₹50-₹60 crore annually from FY2025-26 due to this regulatory move.
4. Is Bodal Chemicals’ stock overvalued?
Yes, its P/E ratio of 114 is significantly higher than the industry average of 22.8, indicating overvaluation.
5. What is the financial outlook for Bodal Chemicals?
The company targets ₹2,000 crore annual revenue, 12%-15% EBITDA margins, and improved profitability as demand stabilizes.
Final Thoughts
The government’s intervention through the anti-dumping duty has created a favorable market environment for Bodal Chemicals, giving it a monopoly in TCCA production in India. While the stock appears overvalued, strong financial performance, revenue growth, and improved margins make it a promising long-term player in the chemical industry.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.