Amal Ltd: Worth Buy For Long term, BSE Code - 506597

08/04/2017 22:51:54
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Q: what are the prospects of Amal Ltd (BSE Code: 506597; Price: Rs.132)?

A: Amal Ltd, a Lalbhai Group company, has been manufacturing bulk chemicals, like Sulfuric Acid and Oleum, and their downstream products, such as Sulphur Dioxide and Sulphur Trioxide chemicals at its Ankleshwar in Gujarat. The company has an installed capacity of 140 tonnes per day. In 2014, when its net worth wiped out, as per the advice of BIFR, the board had decided to merge Amal with Atul Ltd, another group company. As the BIFR itself scrapped in 2016, the Lalbhai Group had withdrawn the merger proposal. The same sick company achieved a decent turnaround. It earned 2015-16 a net profit of Rs 3.71 crore after overcoming the previous year’s net loss of Rs 57.68 lakh. In the current year, it is performing much better. The net profit for the first nine months of 2016-17 was Rs 8.5 crore, which is going to surpass Rs 13 crore for the full year. In terms of EPS, it will be Rs 18. Moreover, the company will get a positive net worth and a total turnaround. The promoters are controlling 53.73% stake in the small equity of Rs 7 crore. The stock is a worth buy for long-term investment.  

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