By Nayan Patel

Indo Borax & Chemicals Ltd.

BSE Code: 524342

Last Close: Rs.87.65

Indo Borax is synonymous with Boric Acid and is referred to as the industry standard for comparisons in the industry. It came into existence in 1980 and traces its roots to Asangaon in Maharashtra where its first boric acid plant was set up in 1981 followed by a borax plant in 1983. Today, it operates the most modern boric acid and borax plant at Pithampur in Madhya Pradesh. Situated near the commercially important town of Indore in the heart of the country, the plant is well connected by an efficient transport network to all parts of India.

It has an equity base of Rs.3.48 crore that is supported by huge reserve of around Rs.38.89 crore (which is more than 11.17% times its equity). The promoters hold 41.29%, non-promoter corporate bodies hold 9.90%, foreign investors hold 5.07% while the investing public holds 43.64% stake in the company.

For Q1FY12, it recorded net sales of Rs.11.50 crore with net profit of Rs.2.51 crore against net sales of Rs.7.54 crore with net profit of Rs.1.56 crore in Q1FY11 (Net sales zoomed 52.51% while net profit zoomed 60.89% on a quarterly basis). For FY11, it recorded net sales of Rs.40.14 crore with net profit of Rs.7.48 crore against net sales of Rs.35.38 crore with net profit of Rs.4.74 crore in FY10. The Q1FY12 EPS is Rs.7.22 while FY11 EPS was Rs.21.48. At the current level, the stock is available at a forward P/E multiple of just 3. It is a regular dividend paying company having paid 5% for FY08 and 15% for FY09, FY10 and FY11. This shows it is an investor-friendly company.

Investors can buy this stock with stop loss of Rs.74. On the upper side, the stock will zoom up to Rs.104 level in the medium-term and Rs.125 levels in the long-term.