Equitymaster Agora Research Private Limited

Independent Investment Research

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His Knack for Picking Beaten Down Stocks Sets Him

Apart!
Welcome to the Eleventh issue of Smart Money Secrets!

Hope you are doing great and enjoying the volatility in the stock market. Both global and Indian equity markets
have gone rouge.

A couple of frauds along with questionable earning reversion has made Indian markets all the more vulnerable.

However, this volatility has nothing to do with our recommendations.

I mean, yes, in the short run these events may put pressure on our stocks; but in the long run, the fundamentals of
a company take over the overall market performance.

In fact, this kind of volatility helps us in recommending more stocks with better Margin of Safety.

Our goal is to get in early and then 'ride sidecar' with the super investors of India. And if we get an opportunity to
recommend stocks below their buy price, we have a better margin of safety.

The super investor we are talking about today is a person who generally doesn't interact to media. He just quietly
picks stocks that he thinks will be multi-baggers of tomorrow.

One of the things that impresses us most about him is, despite his success, you'll see almost zero coverage of him
in the financial media. Why? When the Economic Times asked him for an interview, he said:

"I am a private person. Bull markets create heroes and bear markets create zeroes. So I'd rather stay anonymous."

Super Investor #Ashish Kacholia of Lucky Securities has a long list of successful stock picks.

His stake in Ashiana Housing is a good example. He first bought a piece of the pie in March 2013 and continues to
hold 1.26% of the company.

In a little more than four years, this investment has compounded annually at more than 40% CAGR for an absolute
return of 324%. Phenomenal returns by any standard.

Kacholia has also had success with stocks like DFM foods, eClerx Ltd, Kei Industries, and Shaily Engineering.

His humility and constant learning also impressed us.

"I have felt the company should always perform on a quarter-to-quarter basis, but I learnt to my great expense that
life doesn't work in a linear manner. I have sold-off some of my best stocks because they didn't deliver for a quarter or

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 two and this again is a part of the education that I have had." - Ashish Kacholia

We like his philosophy of seeking out strong businesses and competent managements and remaining patient until
his theory is proven right.

Our Smart Money tool recently flagged a company in which Kacholia has bought a stock in last two quarters. And
the stock has corrected in the recent volatility, which has made it more attractive from Margin of Safety point of
view.

How This Company Turned a Setback into a Comeback

"Failure doesn't mean the game is over, it means try again with experience" - Len Schlesinger

Every successful person who has achieved some things in life has been destroyed at least once. They've had at
least one knock-out moment that crushed them completely.

Bodal Chemicals Ltd (BCL) had such a critical moment during FY12-13. The company had incurred heavy capex in
its earlier years, which led to a liquidity crunch.

To add to that, the demand was sluggish and input costs were high. Foreign exchange fluctuation loss and high
interest cost further compounded the problem.

As a result, the company posted losses in those two fiscals. Finally, BCL left without an option, entered into
Corporate Debt Restructuring (CDR).

For any company under CDR, it is a daunting task to operate a business on a shoe-string budget.

In Dire Straits...

Net Sales 6,137 5,275

Operating Profit 34 198

Interest cost 346 401

Net profit -298 -232

Debt-Equity Ratio (x) 5.7 6.8

(Source: Equitymaster, Company)

However, the great thing about failure is that it provides you with a second chance. BCL learned from its failures
and took on cost-cutting measures, as well as improved efficiency and productivity.

More importantly, due to stricter environmental norms and increased costs substantially eroding the low-cost
advantage of Chinese dye manufacturers, BCL discovered its sweet spot. This presented a huge opportunity for
this large integrated player.

This trend is likely to continue for companies such as BCL in the coming years as well.

With this tailwind, BCL rose like a phoenix from the ashes. The company repaid all of its CDR debt by July 2014.
Since then, there's been no looking back.

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 Making a Strong Comeback...

Net Sales 9,595 10,453 9,099 12,363

Operating Profit 1,888 1,841 1,498 2,258

Interest cost 469 273 122 87

Net profit 302 918 860 1286

Debt-Equity Ratio (x) 3.8 1.1 0.6 0.4

(Source: Equitymaster, Company)

Currently, BCL is one of the largest integrated dyestuff companies in India. Due to its presence across the value
chain, it is the preferred supplier with global MNCs. BCL commands a market share of 25% in dye intermediates
and 10% in dyestuff.

Apart from a shift in production from China to India, another key trigger is a shift from the unorganized to
organized segment.

The unorganized sector share stands around 50% of total dyestuff production. Stringent effluent treatment laws
have resulted in higher operating costs for small-scale players. They've found it increasingly tough to survive. With
GST in place, the pace of shifting toward the larger organized sector will accelerate further.

Considering these factors, as well as the healthy balance sheet, we reckon BCL is firmly placed. And, the recent
correction in the stock price further makes it attractive.

About the Company

Bodal Chemicals Ltd (BCL), established in 1989 was formerly known as JK Pharma. Based in Gujarat, it is a leader
in Dye & Dye intermediates.

BCL commenced its operations by setting up a small Vinyl Sulphone Plant at Vatva - Ahmedabad (Gujarat) with
capacity of 200 T.P.A. which has now expanded to more than 16000 T.P.A.

BCL is the largest manufacturer of dye Intermediates (DI) in India and the only player with effluent disposal
permission of 1mn litres per day. Besides, being the largest DI manufacturer in the country, it is also amongst the
leading dyestuff manufacturer in the domestic market.

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 Environmental Focus - A Key to Sustainable Growth

The company has capacity of manufacturing up to about 25 varieties of Dye Intermediates and up to about 150
variants of Dyestuff which are principally used as raw materials in Textiles, Leather, Paper & other Dyestuff
consuming industries.

The company derives ~35% of its revenues from exports to over 50 countries.

BCL has a unique and integrated product line covering forward and backward integration to dye intermediates. It
contributes about 20% of India's capacity and about 5% of the world's capacity for dye Intermediates.

BCL's Journey

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 Company Introduction

BCL is one of the most integrated dyestuff companies in India today from bulk chemicals and dye intermediates to
dyestuff, with bulk chemicals and dye intermediates being produced in-house for captive use as well as for direct
sales.

The company has the capacity of manufacturing up to about 25 varieties of dye Intermediates and up to about
150 variants of dyestuff which are principally used as raw materials in textiles, leather, paper & other dyestuff
consuming industries. Out of the total production, about 30% is exported to over 50 countries across the world.

One of the key aspects that separate BCL from its competitors is its integrated business model. The company has
a unique and integrated product line covering forward and backward integration to dye intermediates.

Integrated Business Model -Manufacturing Value Chain

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The integrated business model has the following benefits:

Ability to convert by products into new products.

Reduced logistics cost (transfer of raw material is done through pipeline)

Flexibility to use significant basic Chemicals and dye Intermediates in-house

Protection from raw material price volatility

Allows BCL to produce at competitive prices, thereby capturing a larger market share.

Due to its presence across the value chain, the company is the preferred supplier with global MNCs such as BASF,
Huntsman, Colorantes Industriales and Stahl.

BCL commands a market share of 25% in dye intermediates and 10% in dyestuff in the Indian market and 6%
market share in dye intermediates and 3% in dyestuff globally.

Indian dye industry is highly fragmented and characterized by a large number of small players in the unorganized
sector.

The unorganized sector share is around 50% of total dyestuff production. Stringent effluent treatment laws have
resulted in higher operating costs for small-scale players. They've found it increasingly tough to survive.

With GST in place, the pace of shift towards the larger organized sector will further accelerate and the organized
player like BCL is firmly placed to benefit from this shift.

Revenue Profile
The company receives revenue from dye Intermediates (~60% of the revenue), dyestuff (~24% of the revenue),
Basic chemicals (~10% of the revenue) and others contribute the remaining.

# Basic Chemicals
Basic chemicals include a range of chemicals which are used as raw materials for Dye Intermediates and
Dyestuff. Some of the key products in the segment that BCL produces include Sulphuric Acid, Oleum, Sulphur
Trioxide and Chlorosulphonic Acid.

Over 45% of the production of this segment is consumed in house. With this backward integration, BCL is
considerably protected from raw material price volatility.

# Dye Intermediates
Dyes are intensely coloured organic compounds or mixtures used for imparting colour to the substrates ranging
from cloth, paper, leather to plastics in a permanent fashion. The basic importance of dye lies in its product and
resistant to washing.

A dye intermediate is the main raw material used for the manufacturing dyestuff. The manufacturing chain of dyes
can be traced back to petroleum based products.

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Naphtha and natural gas are used for the production of benzene and toluene, which are subsequently used for
manufacturing nitro-aromatics.

The nitro-aromatics are then used for manufacturing the compounds called dye intermediates. Examples of major
dye intermediates are Vinyl Sulphone, Gamma Acid, H Acid, CPC Blue, J Acid, a-Naphthyl Amine, etc.

BCL started its operations initially with one product i.e. Vinyl Sulphone Ester (Acetanilide Base); with gradual
advancement in production capacities. Currently, BCL is producing more than 25 variants of Dye Intermediates
with Vinyl Suphone (Acetanilide Base) as the core product.

Some of the key products in the segment include Vinyl Sulphone Ester, H Acid, F C Acid, DASA, Gama Acid and 6
Nitro. Over 40% of the production of this segment is consumed in-house.

# Dyestuff
Dyestuff is a final product in dye manufacturing value chain. It is used in several industries such as like textiles,
leather, paper, and plastics.

Dyestuffs have been classified in different categories based on the criteria like the colour, origin (natural or
synthetic), chemical structure or constitution, applications and method of application.

Application-based classification is the most useful and widely accepted classification system by dye
manufacturing industries.

The textile industry accounts for the largest consumption of dyestuffs in India (~80% of the total production).

In contrast, 40-50% of dyes produced in the developed countries find application in the paint industry, 30-40% in
other industries and less than 10% of the aggregate is used in the textile sector.

However, due to the growth in export and very high export potential of the dyestuff, the dependence of this sector
on the textile sector is slowly being diluted.

Further, the domestic demands of dyes are increasing due to the growth of industrial paint industries, printing
industries, plastic and tannery industries, which are also consumers of dyestuff.

Bodal Chemicals produces about 150 variants of Dyestuff products in this segment. Some of the key products in
the segment include Acid Black 210, Reactive Black BL/GR, Reactive Black B, Reactive Black 5 and Acid Black 194.
Out of the total production, about 30% is exported to over 50 countries across the world.

Capacity Expansion + New Products = Strong Topline Growth and Margin Expansion

BCL is executing capacity expansion plan across multiple processes/products. This will help the company to cater
to growing demand from end-user industries.

Similarly, BCL is trying to fill the space vacated by reduced supplies from China. The following capex is lined up
which will help BCL to post good growth in coming years.

The new Growth Engine

Dyestuff capacity Expansion BCL had earlier guided to 24,000 MT dyestuff capacity expansion in 3-4 years with the first

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 by 12,000 MTPA plus Ice plant phase of 8,000 MT by end of FY18. The company has now raised the expansion plan for the
first phase to 12,000 MT on the back of product demand.

Multiple Effect Evaporator
Plant (MEEP)
With the new capacity, BCL will increase high value dyes such as Acid brown, Acid red,
Direct yellow, Direct red, Reactive blue, Reactive orange, Reactive printing dyes, and Red
yellow
MEEP treats high load wastewater. Benefits include, requirement of low steam and power,
re-use of condensed water and integrated Zero Discharge System.

Cogeneration Power Plant and Upgrading existing major utility facilities. With a Cogeneration Power Plant, BCL to achieve
Utility section upgrade substantial saving in energy cost. The project will generate power along with steam. It will
also enable uninterrupted production.

Thionyl Chloride Plant (TC) TC sits between Sulphuric Acid and Vinyl Sulphone. BCL will build a TC plant at unit VII.

BCL will benefit from scale, low inventory, quality supply and no transportation cost.
Certain parts of TC will be used in-house and balance TC will be sold to pharma, agro and
chemical industries in the vicinity.

Vinyl Sulphone Plant at SPS By producing both H Acid and Vinyl Sulphone, SPS will utilize effluents of the two plants
Processors (BCL's acquisition, into each other's production respectively. This will generate additional revenue and reduce
acquired in Mar 2017) cost of managing effluents.

Land Acquisition for specialty Exploring opportunities in new specialty chemicals and looking to acquire land in Dahej
chemical complex

(Source: Equitymaster, Company)

Total capex estimates for next 18 months is around Rs 3.5 billion, which includes above capex as well as
maintenance capex and working capital requirement of ~Rs 500 million.

Another interesting aspect is BCL diversifying into high margin products such as specialty chemical and liquid
dyestuff. BCL making small bets which are expected to diversify revenue streams.

BCL's Small Bets

Liquid dyestuff - BCL has recently commissioned a 10,800 tonne liquid dyestuff facility. The liquid
dyestuff is mainly used in the paper industry. The company incurred a capex of Rs 140 million for the
same. At optimum capacity, this segment has a revenue potential of Rs 1 billion with a consequent RoCE
in excess of 100%.

This is a high margin business (EBITDA margin of 20-21%). BCL is primarily targeting export markets for
this product profile. BCL is currently exporting this product to Australia and South Africa. Given the
significant demand in European countries, the company is targeting this region in the near term.

Acquisition of SPS Processors - BCL acquired 70% stake in SPS Processors which is engaged in
manufacturing of dye intermediates. SPS Processors' manufacturing plant, located at Kosi (Uttar
Pradesh), is a zero-discharge unit fully compliant with environmental regulations.

SPS has all necessary permissions in place to manufacture vinyl sulphone (another dye intermediate) as
well as the dyestuff. This acquisition will help BCL to expand its presence in the domestic market. SPS'
locational advantage in the north at crossroads of four states, strengthens BCL's competitive position.

Joint Venture with Trion Chemicals (TCPL) - BCL made an investment of Rs 150 million in TCPL for a
42% stake. The objective of this acquisition for BCL is to expand and diversify in the business of
specialty chemicals apart from dyes & dye intermediates.

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 TCPL is engaged in the production of a compound which is a disinfectant, algaecide and bactericide
mainly for swimming pools. It is also used as a bleaching agent in the textile industry. TCPL is mainly
targeting the US market and has already acquired EPA license in the US for environment protection. At
optimum capacity utilisation levels, it is expected to generate an annual turnover of Rs. 2.25-2.50 billion.

Linear Alkyl Benzene Sulphonic Acid (LABSA) Project - BCL, through its wholly-owned subsidiary
Bodal Agrotech Limited (BAL), has started a new plant for the manufacture of LABSA. It is an anionic
surfactant widely used in all ranges of domestic detergents powder, cake and dish wash cleaners. The
total annual capacity for this plant is 18,000 MTPA. At an optimum capacity utilisation level, BAL is
expected to generate an annual turnover of Rs 1 billion.

How Structural Shift in the Dyestuff Industry will help BCL?

Between 2000-10, China's chemical industry grew rapidly on the back of government's support such as export
incentives and electricity subsidy. The government also provided support in project funding, fiscal sops and bank
credit. Additionally, China enjoyed cheap labour advantage.

With this, China overtook the US to become the world's largest chemical market in 2010. Foreign direct
investments by chemical multinationals boomed as China became more integrated into the world economy and
chemicals became a major Chinese export.

During this period, the chemical companies in China built huge capacities but ignored effluent(waste) treatment.
Chinese companies continued to deposit industrial waste in their rivers at the cost of economic growth.
Something had to give.

In 2015, the Chinese government woke up to the real dangers of water scarcity across the country. Rivers were
drying up. According to the 2015 State of Environment Report by the Chinese ministry, 28% of its river water was
marked as "unfit for human contact".

Why China Is Running Out of Water

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The Chinese government sprang into action. It proposed to shut down or shift its 1000 odd companies to a 'green
belt'. Also, effluent treatment, i.e. the treatment of liquid waste or sewage, was a pre-requisite requirement to
receive export incentives. Investments had to be made to set up new effluent treatment plants. This meant lower
capacity utilization levels and higher gestation periods.

Their low labor cost card was also not playing out as expected. From 2011 to 2016, the average hourly rates have
increased by 64% to US $3.60. This is five times that of India. The booming Chinese economy also led to increase
in pay for employees.

Indian dye manufacturers used to face strong competition from Chinese dye companies. However, in a recent
move to control pollution, the Chinese government has cracked down on some companies, which has led to the
shutdown of a major dye manufacturer in China, which was contributing nearly 30% of global dye production.

The Case of Hubei Chuyuan Group

Hubei Chuyuan Group was one of the largest chemical companies in China, having a presence in dyestuffs,
dyestuffs intermediate, fertilizers, pesticides and pharmaceuticals. The company also has the world's largest
production unit for H-acid, K-acid and Para base.

The company, which had a 30% market share in the sector, was recently shut down by the government on
environmental concerns. In June 2016, the local environmental watchdog in central China's Hubei Province
heavily fined Hubei Chuyuan Group and one of its subsidiary companies, more than 27 million yuan (about 4
million US dollars) for discharging excessive pollutants and setting up private discharge channels. The fine
was the largest ever handed down by Hubei environmental authorities.

Now, effluent treatment mechanism is a pre-requisite to carry on business and to receive export incentive. This
has substantially increased the manufacturing cost for Chinese firms and eradicated the low-cost advantage.

Environmental compliance cost in terms of setting up effluent treatment plant (CETP) constitutes a huge cost
(about 20% of capital outlay). This means that the cost arbitrage Chinese manufacturers were enjoying due to
non-compliance would be lost. Additionally, China manufacturers no longer enjoy a huge export incentive like they
did in the early 2000s. Similarly, labour cost arbitrage is also lost.

India's Competitive Edge

10
With frequent plant shutdowns in China, global customers are looking at diversifying their procurement base and
increasingly targeting India as the next alternate source, thereby benefiting Indian dye intermediates and dye stuff
industry at large.

There has been a phenomenal change in the structural dynamics in the dyestuff industry. Going forward, new
capacities are unlikely to be added in China due to the stringent environmental norms. With this, integrated players
like BCL are strongly positioned to capitalize on this opportunity.

Who Owns the Company?

Our love to find owner-operators is well known to our subscribers. What we mean by owner-operator setup is
owners who are involved in the operations of the business. This gives us the comfort on the incentives of the
owners.

The promoters hold 55% (post the recent QIP) stake in BCL.

Suresh J Patel is the Chairman and Managing Director of BCL. He founded the company in 1989 as a young, first
generation entrepreneur.

He has been associated with BCL over nearly three decades. He is a Chemistry graduate with hands on experience
in the Chemical Industry. He has more than 22 years of experience in the production and marketing of Dye
Intermediates. He currently holds around 28.4% in the company.

Bhavin S. Patel is the Executive Director of Bodal Chemicals. He has been with Bodal for the last 14 years. He
currently heads the Dyestuff Division. He also leads the Liquid Dyestuff initiatives. He holds a Bachelor's Degree in
Science. He holds around 8% in the company. Further, Mr. Ankit S. Patel holds around 5.4% in the company.

Rest is held by the Patel Family. The company has recently completed its QIP (Qualified Institutional Placement)
and has diluted some stake.

Even though we don't like promoters diluting their stake in their company, but with a bad history of debt and
focusing on growth opportunities, dilution makes sense. (However, we will penalize the company in the Smart
Money Score and valuations).

Promoters Holding Closely

Sureshbhai Jayantibhai Patel 32 31.8 31.8 31.8 28

Bhavin Suresh Patel 9 8.7 8.7 8.7 8

Ankit Sureshbhai Patel 6.0 6.0 6.0 6.0 5.4

Other (Patel Family) 19.09 17.71 17.57 15.05 13.45

Total 65.6 64.2 64.0 61.5 54.9

Source: Stock Exchange, Equitymaster

In fact, Ashish Kacholia has entered the company in September 2017 and ICICI Pru and Reliance MF have
participated in the recent QIP.

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 Smart Money Invested

Does the Company Qualify on Equitymaster's Smart Money Score TM?

We believe, any good business needs to pass our checklist i.e. smart money score. You can find a detailed
explanation of what the smart money score in our guide. Smart Money Secrets - A Quick Start Guide.

1. Smart Money Invested - One of the important catalysts we look for in a stock is the smart money. Based on the
holding (higher the better) and our comfort with super investor we assign a rating on a scale of 10.

We also like to see either the super investor or the promoters of the company increase their stake in the
company.

In the case of BCL, smart money has entered the stock in the last two quarters. Ashish Kacholia has got around
1% in the company in the last two quarters. In fact, with the recent QIP, funds like ICICI Pru and Reliance MF has
entered the stock.

Smart Money Investing in the Company

Ashish Kacholia - 1.1 1.1

ICICI Prudential Balanced Fund - - 3.6

Reliance Capital Trustee - - 2.1

Source: NSE, Ace Equity

The owners of the company also hold a sizable stake in the company. Patel family holds around 55% in the
company. However, the promoters have diluted some stake in the company. The reason for the dilution has been
the expansion.

The company is going into expansion and don't want to leverage the balance sheet over and above 0.5 times (as
it has learned hard way by going into CDR).

Promoters Closely Holding the Stake

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 Sureshbhai Jayantibhai Patel 32 31.8 31.8 31.8 28

Bhavin Suresh Patel 9 8.7 8.7 8.7 8

Ankit Sureshbhai Patel 6.0 6.0 6.0 6.0 5.4

Other (Patel Family) 19.09 17.71 17.57 15.05 13.45

Total 65.6 64.2 64.0 61.5 54.9

Source: Stock Exchange, Equitymaster

We believe smart money is adequately invested in the company. However, since, promoters have diluted their
stake, we penalize the company by 3 points and hence, we assign a rating of 7 to the company.

2. Business quality - BCL is the largest manufacturer of dye Intermediates (DI) in India and the only player with
effluent disposal permission of 1mn litres per day. Besides, being the largest DI manufacturer in the country, it is
also amongst the leading dyestuff manufacturer in the domestic market.

BCL has a unique and integrated product line covering forward and backward integration to dye intermediates. It
contributes about 20% of India's capacity and about 5% of the world's capacity for dye Intermediates.

Even though it is purely into the commodity business, but it has over the years de-risked its business by
backward integration. In fact, the disruption in the Chinese chemical industry and Indian un-organised industry
bodes well for the company.

In fact, what we like about the company is it has learned from its own lessons. The company did a massive
mistake of over-leveraging its balance sheet and went into CDR. However, it has come out of the CDR with flying
colours and now has a lean balance sheet.

Business Quality

ROEs (out of 1.5) 21% 17% 1

ROCES (out of 1.5) 20% 23% 1

Total 2

Topline & Bottomline CAGR 10 years > 10% Last 10 year Average Next 4 Year Average Score (out of
3)

Topline Growth (out of 1) 17% 12% 0.75

Bottomline Growth (out of 1) 28% 11% 0.75

Operating Profits (out of 1) 30% 12% 0.75

Total 2.25

Debt to Equity Last 10 year Average Next 4 Year Average Score (out of
2)

D/E 3.4 0.2 1

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 Opeating Cash Flows Last 10 year Average Next 4 Year Average Score (out of
2)

OCF/PAT 1.0 1.2 2

Source: Ace Equity

In the last ten years, its sales have grown at a CAGR of 17% and net profits by 28%. The growth in the operating
profits has been even better and grew at a CAGR of 30%.

As discussed, it has repaid its high debt and now aims to keep debt below 0.5 times. Even with the turbulence (3
years of making loss), the company on an average in the last 10 years returned ROEs and ROCEs of 21% and
20% respectively.

Even though we believe that company has got some non-commodity characters in financial numbers, we
penalize the company for being in the commodity business & high debt in the past and assign a rating of 7.25
on business quality.

3. Competitive advantage - One of the important factors super investors look for is sustainable competitive
advantages aka economic moats. They love to invest in companies focusing on widening of moats.

As discussed, BCL is one of the few companies with an integrated business model. Which helps it to stand itself
apart from otherwise commoditized industry.

The integrated business model has the following benefits:

Ability to convert by products into new products.

Reduced logistics cost (transfer of raw material is done through pipeline)

Flexibility to use significant basic Chemicals and dye Intermediates in-house

Protection from raw material price volatility

Allows BCL to produce at competitive prices, thereby capturing a larger market share.

Due to its presence across the value chain, the company is the preferred supplier with global MNCs such as
BASF, Huntsman, Colorantes Industriales and Stahl.

BCL commands a market share of 25% in dye intermediates and 10% in dyestuff in the Indian market and 6%
market share in dye intermediates and 3% in dyestuff globally.

Apart from the integrated business model, what also set Bodal apart is the capital-intensive nature of the
business.

This keeps new entrants out of the business to an extent and over the years helps in sector consolidation. (with
more than 50% of market share with un-organized players - these players don't survive in bad times because of
the debt-laden balance sheets)

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 Even though company has a differentiated model with quite a few competitive advantages over the competitors,
the industry is fragmented and hence we penalize it and assign a rating of 7.

4. Soul in the Game - The idiom of soul in the game stands for the owner operated companies i.e. companies
where owners and operators of the business are same. We believe higher stake and active involvement in the
business puts the incentives perfectly aligned.

So, we look out for companies owned and operated by good managers.

As indicated above, BCL is owned and managed by the patel family. The family holds around 55% in the
company. Please note this is post the dilution.

We love management that learns from their own mistakes. As discussed above, Bodal went to debt restructuring
and made losses. The management identified one of their biggest mistake i.e. over-leveraging their balance
sheet.

It now takes utmost care of not over leveraging its balance sheet and grow with internal accruals. We really like
management mistake learning attitude.

Also, we have gone through the auditor's report and Related Party Transactions; even though the company has
entered in some related party transactions, we do not find any material transactions which may raise questions
on the management integrity.

We believe, the management has put its soul in the business. This is a kind of pattern our Super Investors look
out for. However, given the fact that the management diluted some stake we penalize the company and assign a
rating of 8 on this parameter.

5. Capital allocation - One of the patterns our super investors and we seek for is the efficient capital allocation by
the management. The best way to evaluate this could be to look at both the sources and the application of the
funds by the management over a period.

Sources of Funds

By sources of funds we mean the money raised by the company to grow its business. Typically, there are three
big sources i.e. Equity Dilution, Raising Debt and Internal Accruals (cash generated by the business).

We love the companies with capabilities of funding their growth using cash generated by the business itself.
Further, if these companies are present in the industries with big market opportunity, sky is the limit for them.

In case of BCL, in the period FY12-17, of the total funds raised by the company, over 50% of the total funds were
generated by the business.

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 Sources of Funds over FY12-17

Application of Funds

After sourcing the capital, the next and most important aspect is the allocation of the raised money. We believe
generating cash from the business is not enough, it is very important for the company to deploy the same in
profitable ventures.

In the case of BCL, around 39% has gone towards loan re-payment and 19% has gone towards new capex.

Application of Funds over FY12-17

We believe, the management has burned its hand and now understand how important it is to keep a light
balance sheet and deploy capital in a more smarter manner. Even though we assign full marks for sourcing, we
deduct two points for application as, more than 50% of the money went for debt and interest payment. We, thus,
assign a rating of 8 for capital allocation.

6. Earnings quality - One of the key challenges while evaluating small and mid-cap companies is the quality of their
earnings.

The growth in the sales and profits should translate into cash flows for the company. There should be a good

16
 comparison between the accounting and cash profits to understand the quality of the earnings.

One crucial tool to check the earnings quality is the proper analysis of the Cash Flow Statements (which many
people miss to look at).

Over the years, we have found a similar pattern in companies that were fraudulent or bankrupt or both in India
and abroad. The usual culprit in both the cases involved money stuck in their working capital which meant
accounting profits weren't converted into cash profits.

We have devised a simple way to inspect earnings quality of any company. We begin with cash flow from
operations. Divide it in two parts i.e. Gross Cash Flow from Operations (GCFO) and Net Cash Flow from
Operations (NCFO). The difference being the 'changes in working capital'.

As a thumb rule, for a manufacturing company NCFO as a percentage of GCFO should not be significantly below
sixty percent. This simply means ideally not more than forty percent of the money should be stuck in working
capital.

We applied the same rule on BCL and over FY12-17 this number on an average stood at 102% which well above
the sixty percent rule.

We also compare the net cash flow from operations with operating profits because theoretically they should be
close to each other. For BCL both accounting and cash operating profits were close.

The company has got a very comfortable cash conversion cycle with 66 days (5-year average).

We assign a rating of 8 on earnings quality.

7. Scalability of the business - Identifying a good business is one thing, identifying a good business with potential
to grow at decent rates for years to come is another. One crucial factor for a business is the size of the market it
caters to.

In 2015, the Chinese government woke up to the real dangers of water scarcity across the country. Rivers were
drying up. According to the 2015 State of Environment Report by the Chinese ministry, 28% of its river water was
marked as "unfit for human contact".

The Chinese government sprang into action. It proposed to shut down or shift its 1000 odd companies to a
'green belt'. Also, effluent treatment, i.e. the treatment of liquid waste or sewage, was a pre-requisite requirement
to receive export incentives.

Investments had to be made to set up new effluent treatment plants. This meant lower capacity utilization
levels and higher gestation periods.

Their low labor cost card was also not playing out as expected. From 2011 to 2016, the average hourly rates
have increased by 64% to US $3.60. This is five times that of India. The booming Chinese economy also led to
increase in pay for employees.

Indian dye manufacturers used to face strong competition from Chinese dye companies. However, in a recent
move to control pollution, the Chinese government has cracked down on some companies, which has led to the
shutdown of a major dye manufacturer in China, which was contributing nearly 30% of global dye production.

17
 Now, effluent treatment mechanism is a pre-requisite to carry on business and to receive export incentive. This
has substantially increased the manufacturing cost for Chinese firms and eradicated the low-cost advantage.

Environmental compliance cost in terms of setting up effluent treatment plant (CETP) constitutes a huge cost
(about 20% of capital outlay). This means that the cost arbitrage Chinese manufacturers were enjoying due to
non-compliance would be lost. Additionally, China manufacturers no longer enjoy a huge export incentive like
they did in the early 2000s. Similarly, labour cost arbitrage is also lost.

India's Competitive Edge

With frequent plant shutdowns in China, global customers are looking at diversifying their procurement base
and increasingly targeting India as the next alternate source, thereby benefiting Indian dye intermediates and
dye stuff industry at large.

There has been a phenomenal change in the structural dynamics in the dyestuff industry. Going forward, new
capacities are unlikely to be added in China due to the stringent environmental norms. With this, integrated
players like BCL are strongly positioned to capitalize on this opportunity.

Bodal's sales and profits have grown at a CAGR of 17% and 28% respectively in the last ten years. We expect the
company to deliver revenue and profit CAGR of 12% and 11% respectively over FY17-21.

Thus, given all these factors, we assign a rating 8 based on scalability of business parameter.

8. Market leadership - Dye Intermediates and Dyestuff industry by nature is fragmented with more than 50% of
market share with unorganized players.

BCL commands a market share of 25% in dye intermediates and 10% in dyestuff in the Indian market and 6%
market share in dye intermediates and 3% in dyestuff globally.

Indian dye industry is highly fragmented and characterized by many small players in the unorganized sector.

The unorganized sector share is around 50% of total dyestuff production. Stringent effluent treatment laws have
resulted in higher operating costs for small-scale players.

18
 They've found it increasingly tough to survive. With GST in place, the pace of shift towards the larger organized
sector will further accelerate and the organized player like BCL is firmly placed to benefit from this shift/

So, even though the company has got all the right ingredients to be the market leader but given the fragmented
nature of the industry it operates we assign a rating of 8 on market leadership.

Considering the above analysis, the total ranking assigned to the company is 60.25 (out of 80). On a weighted
basis, it stands at 7.5. This indicates that fundamentals of the business are strong.

Equitymaster Smart Money ScoreTM

Smart Money Invested 7.0                     15.0% 1.1

Business Quality 7.3                     15.0% 1.1

Competitive Advantage 7.0                     10.0% 0.7

Soul in the Game 8.0                     10.0% 0.8

Capital Allocation 8.0                     10.0% 0.8

Earnings Quality 7.0                     15.0% 1.1

Scalablilty in the Business 8.0                     15.0% 1.2

Market Leadership 8.0                     10.0% 0.8

What are the Risks to look out for?

Increase in Raw Material Prices and forex volatility
Increase in price of input materials could impact the Company's profitability to the extent that the same
are not absorbed by the market through price increases. Some of the key raw materials include
naphthalene, aniline, sulfur, crude derivatives etc. This, along with fluctuation in foreign exchange rate
could impact the company's revenue and profitability as BCL derives ~30% of its revenue from exports.

Capital Intensive Business

BCL's business is capital intensive, requiring continuous capex for growth and maintenance. Similarly,
the business is also working capital intensive.

Working capital as a percentage of total operating capital employed is around 43%. BCL is doing the next
round of capex through QIP (QIP of ~Rs 2.25 billion raised in October 2017) and internal accruals. QIP
will lead to equity dilution for existing shareholders. Further, the execution of any un-envisaged large
sized debt funded capital expenditure could lead to increase in interest outgo and a decline in
profitability.

19
 Slowdown in End-User Industries
Any slowdown in domestic and world economies can impact the growth of BCL's end-user industries
such as textiles, leather, paper, detergent and water treatment. This could impact growth.

Updates On BODAL CHEMICALS: Valuations

Add: Alert | Portfolio
We have valued Bodal Chemicals Ltd based on
Market Data price to earnings basis. In fact, given the One could
company is growing rapidly and can surprise consider
Price On Reco. Date (Rs) 125 (BSE)
our conservative assumptions on the positive buying the
CMP - BSE / NSE (Rs) 125 / 125 side, we have conducted a scenario analysis. stock of Bodal
Change Since Reco.  0.0% Chemicals Ltd
52-week High/Low (Rs) 193 / 120 What we have essentially done is kept both at current
the earnings growth and the PE multiple in a price or lower.
NSE Symbol BODALCHEM

BSE Code 524370

range that we are comfortable with and have
tried to deduce target price based on different combinations of the same.
No. Of Shares 122.2 m

Face value 2
The below permutations and combinations based on earnings growth and
FY17 dividend/share (Rs) 0.8
P/E multiples gives a fair idea about the potential upside for the stock.
Dividend yield (%) 0.6% However, in addition to this we have derived a target price on basis of our
Stock Classification Small cap numbers.
Free Float 45.07%

Market Cap (Rs m) 15,275

Premium Search

Rs 100 Invested Is Now Worth

View Updated Chart

More On BODAL CHEMICALS

All Recommendation Reports | Latest Update | Latest Stock Quote

Expected Target Price (FY21) Under Different Assumptions of Earnings Growth and P/E Multiples

Earnings CAGR (FY17-FY21E)

8% 10% 12% 15% 18%

10 158 173 185 206 228

12 190 207 223 247 274

15 237 259 278 309 343

20
 17 269 293 315 350 388

BCL is one of the most integrated dyestuff companies in India today from bulk chemicals and dye intermediates to
dyestuff, with bulk chemicals and dye intermediates being produced in-house for captive use as well as for direct
sales. The company has also diversified into specialty chemicals.

Due to its presence across the value chain, it is the preferred supplier with global MNCs. BCL commands a market
share of 25% in dye intermediates and 10% in dyestuff.

Stricter environmental norms and increased costs have substantially eroded the low-cost advantage of Chinese
dye manufacturers. This presented a huge opportunity for large integrated players like BCL. The company is trying
the space vacated by reduced supplies from China.

Not to mention, BCL is executing capacity expansion plan across multiple processes/products. With the Dyestuff
expansion, ramp-up at SPS and Trion Chemicals, we expect BCL to maintain sustained growth for the next three
years.

Despite capital intensiveness of the industry, BCL managed to keep its debt-equity ratio in check with its debt-
equity ratio hovering below 0.5 in FY17. With this, BCL has a stable financial profile. However, considering the
commodity nature of the industry, we assign a multiple of 12 times from FY21 perspective.

As such, we have arrived at a target price of Rs 190 for the company (from FY21 perspective). This implies a CAGR
of ~22% (excluding dividend yield of ~0.6%) and a point to point upside of 52%.

The maximum buy price for the stock is Rs 140.

According to us, in a scenario of ideal allocation of funds, predominantly mid and small-cap stocks could be
considered to comprise of not more than 30-40% of your total equity portfolio. Further, we believe a single small
cap stock should not form more than 2-3% of the total portfolio. Please note that this allocation will vary from
person to person. For something that works best for you, we recommend you talk to your investment advisor.

Financials At A Glance

Sales 9,099 12,363 11,616 13,928 16,245 19,517

Sales growth (%) -13.0% 35.9% -6.0% 19.9% 16.6% 20.1%

Operating Profit 1,498 2,258 2,004 2,513 2,968 3,584

Operating profit margin (%) 16.5% 18.3% 17.3% 18.0% 18.3% 18.4%

Net profit 860 1,286 1,081 1,285 1,545 1,928

Net profit margin (%) 9.4% 10.4% 9.3% 9.2% 9.5% 9.9%

             

Balance Sheet            

Current assets 3,074 4,065 5,482 5,015 5,712 6,781

Fixed assets 1,922 2,306 3,962 5,898 6,754 7,253

Investments 16 125 125 125 125 125

Other non current assets 86 478 475 568 660 791

Total Assets 5,099 6,975 10,044 11,605 13,251 14,950

21
              

Current liabilities 1,170 1,686 1,595 1,912 2,230 2,679

Net worth 2,346 3,593 6,832 7,963 9,286 10,936

Loan funds 1,429 1,490 1,366 1,433 1,393 984

Other liabilities 154 207 250 296 343 349

Total liabilities 5,099 6,975 10,044 11,605 13,251 14,950

Key Financial Ratios

Ratios FY16 FY17 FY18E FY19E FY20E FY21E

Operational & Financial Ratios

EPS (Rs.) 8 12 9 11 13 16

Book Value per share (Rs.) 19.2 29.4 55.9 65.2 76.0 89.5

Dividend Payout Ratio (%) 8% 7% 7% 10% 12% 12%

             

Margin ratios (%)

EBITDA Margins 16% 18% 17% 18% 18% 18%

EBIT Margins 15% 16% 15% 15% 15% 15%

PBT Margins 14% 16% 14% 14% 14% 15%

PAT Margins 9% 10% 9% 9% 10% 10%

             

Performance Ratios (%)            

ROE 37% 36% 16% 16% 17% 18%

ROCE 36% 40% 21% 22% 23% 25%

ROIC 26% 29% 16% 18% 18% 20%

             

Turnover Ratios Days

Debtors 67 68 70 70 70 70

Inventory 36 39 40 40 40 40

Creditors 42 46 45 45 45 45

Cash Conversion Cycle (days) 61 61 65 65 65 65

Fixed Assets turnover (x) 4.7 5.8 3.7 2.8 2.6 2.8

             

Financial Stability Ratios (x)

Debt-equity 0.6 0.4 0.2 0.2 0.2 0.1

Current ratio 2.6 2.4 3.4 2.6 2.6 2.5

             

Growth Ratios

Net Sales growth (%) -13% 36% -6% 20% 17% 20%

PAT growth (%) -6% 50% -16% 19% 20% 25%

             

Valuation Ratios

Price to earnings (x) 15.9 10.6 14.1 11.9 9.9 7.9

22
 Ratios FY16 FY17 FY18E FY19E FY20E FY21E
Price to book value (x) 1.7 1.2 1.3 1.1 0.9 0.8

Price to sales (x) 6.5 4.3 2.2 1.9 1.6 1.4

Performance Review
This is as per the closing prices for the stocks as on 19th March 2018.

The stock of SP Apparels is trading below the price at which we had originally recommended the stock. Our
maximum Buy price for the stock is Rs 460. Thus, we maintain BUY view on the stock of SP Apparels.

Our view on the stock of TCPL Packaging Ltd remains a HOLD considering the steep run-up in its prices post our
recommendation. Please note the maximum Buy price for the company is Rs 600.

The stock of Ador Fontech Ltd has also gained since our recommendation. The maximum Buy price for the
company is Rs 100. Given that the current price is above the maximum Buy price, our view on the stock of Ador
Fontech remains HOLD.

Mayur Uniquoters has also gained considerably since we recommended the stock. The maximum Buy price for
this stock is Rs 400. Since the current price is above our maximum Buy price, our view on the stock of Mayur
Uniquoters remains a HOLD.

TVS Srichakra Ltd has corrected a bit in last one month and now trades below our maximum buy price. The
maximum Buy price for this stock is Rs 3,250. Thus, we change our view on the stock of TVS Srichakra Ltd from
HOLD to BUY.

Honda Siel Power Products Ltd has also corrected in last month and now trades below our maximum buy price.
The maximum Buy price for this stock is Rs 1,400. Since the current price is below our maximum Buy price, we
change our view from HOLD to BUY.

Jagran Prakashan Ltd has fallen since we recommended the stock. Thus, the current price is still below our
maximum Buy Price of Rs 185. Hence, we maintain our BUY view on the stock of Jagran Prakashan Ltd.

Ashiana Housing Ltd has fallen since we recommended it. The maximum Buy price for this stock is Rs 200. Hence,
we maintain our BUY view on the stock of Ashiana Housing Ltd.

Newgen Software Technologies Ltd has not moved much since we recommended the stock last month. The
maximum Buy price for this stock is Rs 260. Hence, we maintain our BUY view on the stock of Newgen Software
Technologies Ltd.

The performance review of our open positions table is mentioned below:

Summary of Open Positions for Smart Money Secrets as on 19th March 2018

SP Apparels Ltd 3-Jun-17 Buy 424 766 333 -21% Buy 130%

23
 TCPL Packaging 23-Jun-17 Buy 515 1,100 610 19% Hold 80%
Ltd

Ador Fontech Ltd 27-Jul-17 Buy 95 169 112 17% Hold 51%

Mayur Uniquoters 21-Aug-17 Buy 345 673 487 41% Hold 38%
Ltd

TVS Srichakra Ltd 25-Sep-17 Buy 3,127 4,934 3,189 2% Buy 55%

Honda Siel Power 26-Oct-17 Buy 1,314 2,387 1,395 6% Buy 71%
Products Ltd

Jagran Prakashan 22-Dec-17 Buy 171 312 164 -4% Buy 90%
Ltd

Ashiana Housing 27-Jan-18 Buy 187 328 158 -16% Buy 108%
Ltd

Newgen Software 26-Feb-18 Buy 239 416 230 -4% Buy 81%
Technologies Ltd

Bodal Chemicals 19-Mar-18 Buy 125 190 125 0% Buy 52%

Ltd

Here is our list of Top Stocks To Consider Buying

Ashiana Housing

Honda Siel

TVS Srichakra

Kunal Thanvi (Research Analyst), Managing Editor,Smart Money Secrets, a member

of the Institute of Chartered Accountants and the Companies Secretaries of India. He
started his career with a PMS as a buy-side analyst. He is a balance sheet driven
analyst who loves niche businesses with competitive advantages.

He practices value investing based on Ben Graham's principles of 'Margin of Safety'

and 'Mr Market'. He is an avid reader who believes it's better to learn vicariously than
the hard way.

Where StockSelect Fits In...

Stock markets tend to be very volatile. And putting too much money in a single stock
can be very risky. In our view, large cap/ blue-chip stocks are the safest of the lot.
Because of their large size, they may not grow as fast as small caps or mid caps. But
they are relatively more stable and resilient to negative macroeconomic developments.
This keeps them in good stead over the long term and makes them reliable wealth
creators.

According to us, large cap/ blue chip stocks should comprise at least 60% of one's
total equity portfolio. However, a single large cap/ blue-chip should not form more
than 5-6% of the total portfolio.. This allocation will of course vary from person to person. For something that works best for you,
we recommend you talk to your investment advisor.

Frequently Asked Questions

24
These are some of the Most Frequently Asked Questions on Smart Money Secrets. Please view the others here.

If the stock price runs up post the recommendation and trades at levels higher than the
buy price, should one still buy the stock?
Please note that small and midcap stocks, in general, have low market capitalisation and liquidity. There is always
the possibility that these stocks may shoot up in price in no time, even at the time of our recommendation.

Therefore, we would like to recommend to our subscribers not to chase prices and not to consider buying a stock
once it goes beyond our recommended maximum buy price. There will be enough recommendations in a year so
that the pain of missing out on a few recommendations is eased considerably.

Do note that we give maximum buy price range for every stock we recommend in Smart Money Secrets.

Can there be an overlap or contrary views on the stocks recommended under this service
and that of the other Equitymaster services?
We believe that earning good returns from stocks is all about following a well-defined process.

In line with this, each of our product teams, be it the Smart Money Secrets team or Hidden Treasure or The India
Letter, has its own unique screen and checklist for selecting and recommending stocks. In rare cases, where there
is a compelling proposition to recommend a stock in more than one service simultaneously, could there be an
overlap in stocks.

For example, the Smart Money team has unique smart money screener for any stock to pass i.e. 1) Greater than 1%
shareholding of Super Investors; 2) Bulk & Block Deals; and 3) Increasing Promoter Shareholding. On the other
hand, same stock could be recommended under another service irrespective of the smart money screener. In fact,
any service may have recommend a stock and now smart money has entered the stock, it becomes a candidate
for Smart Money Team.

Thus, there could be recommendations that overlap with those in our other services. This aspect also leaves the
stage open for sometimes contradictory recommendations.

What does 'Closed Position' mean?

StockSelect recommendations are meant to meet the target prices within a time frame of three years. So when the
stock meets target price or completes the time frame we 'close the recommendation'. However, since we keep
reviewing our assumptions and estimates for the stock even in the interim, the view or target price on the stock
may warrant a change. This could be a revision upwards or downwards. In such cases, if the previous
recommendation on the stock is no longer valid we close that recommendation. So we essentially close
recommendations either by giving a Sell view or putting out a changed view.

How to read the returns calculations?

For positions that are not closed returns are calculated from date of recommendation till date.

For closed positions, there can be two types of calculations.

Assuming we initially gave a Buy on a stock with no subsequent recommendations on the same stock.
In that case the calculation is fairly simple. The returns shown in this case is simply the change in stock
price from the date of recommendation till the date on which the position was closed.

25
 Now let us take a case where we initiated with a Buy (1st position) and subsequently came with another
recommendation (2nd position) on the same stock. Let us assume that the subsequent
recommendation was also a buy. In such cases, the return calculation depends on whether the 1st
position is closed or not. If the first position is closed before we reiterate buy then the return on the first
position will be calculated as shown previously. However, if 1st position was not closed before we
reiterated buy, then the return calculation is from the earlier buy recommendation till the date on which
the position was closed. Basically where we have reiterated view on a stock we try to show cumulative
returns. The same logic applies with Hold recommendations as well.

Now let us look at Sell recommendations. There can be two situations here.

If there is no recommendation subsequent to the Sell recommendation we show maximum drop in stock
price from date of sell recommendation till date.

If the Sell recommendation is followed up by another recommendation, we show maximum drop in stock
price between the two recommendation dates.

Basically we have tried to cover all hypothetical instances in this note that may help you better understand the
return calculations and closed positions of our recommendations. If you have any query pertaining to it please do
write in to us for further clarifications.

Definitions of Terms Used

Buy recommendation: This means that the subscribers could consider buying the concerned stock at
current market price keeping in mind the tenure and objective of the recommendation service.

Hold recommendation: This means that the subscribers could consider holding on to the shares of the
company until further update and not buy more of the stock at current market price.

Buy at lower price: This means that the subscribers should wait for some correction in the market price
so that the stock can be bought at more attractive valuations keeping in mind the tenure and the
objective of the service.

Sell recommendation: This means that the subscribers could consider selling the stock at current
market price keeping in mind the objective of the recommendation service.

To enhance your experience of using StockSelect and to ensure that this journey is smooth for you we have compiled a list of
Frequently Asked Questions.

DISCLOSURES UNDER SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014

INTRODUCTION:
Equitymaster Agora Research Private Limited (hereinafter referred to as "Equitymaster"/"Company") was incorporated on October 25, 2007. Equitymaster is a joint
venture between Quantum Information Services Private Limited (QIS) and Agora group. Equitymaster is a SEBI registered Research Analyst under the SEBI (Research
Analysts) Regulations, 2014 with registration number INH000000537.

BUSINESS ACTIVITY:
An independent research initiative, Equitymaster is committed to providing honest and unbiased views, opinions and recommendations on various investment
opportunities across asset classes.

DISCIPLINARY HISTORY:
There are no outstanding litigations against the Company, it subsidiaries and its Directors.

26
GENERAL TERMS AND CONDITIONS FOR RESEARCH REPORT:
For the terms and conditions for research reports click here.

DETAILS OF ASSOCIATES:
Details of Associates are available here.

DISCLOSURE WITH REGARDS TO OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST:

a. 'subject company' is a company on which a buy/sell/hold view or target price is given/changed in this Research Report
b. Except for TVS Srichakra, Equitymaster has no financial interest in any other Subject Company forming a part of this report.
c. Equitymaster's investment in the subject company is as per the guidelines prescribed by the Board of Directors of the Company. The investment is however made
solely for building track record of its services.
d. Equitymaster's Associates and Research Analyst or his/her relative doesn't have any financial interest in the subject company.
e. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one percent or more securities of the subject
company at the end of the month immediately preceding the date of publication of the research report.
f. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have any other material conflict of interest at the time of publication of the research
report.

DISCLOSURE WITH REGARDS TO RECEIPT OF COMPENSATION:

a. Neither Equitymaster nor it's Associates have received any compensation from the subject company in the past twelve months.
b. Neither Equitymaster nor it's Associates have managed or co-managed public offering of securities for the subject company in the past twelve months.
c. Neither Equitymaster nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject
company in the past twelve months.
d. Neither Equitymaster nor it's Associates have received any compensation for products or services other than investment banking or merchant banking or
brokerage services from the subject company in the past twelve months.
e. Neither Equitymaster nor it's Associates have received any compensation or other benefits from the subject company or third party in connection with the
research report.

GENERAL DISCLOSURES:

a. The Research Analyst has not served as an officer, director or employee of the subject company.
b. Equitymaster or the Research Analyst has not been engaged in market making activity for the subject company.

Definitions of Terms Used:

a. Buy recommendation: This means that the subscriber could consider buying the concerned stock at current market price keeping in mind the tenure and objective
of the recommendation service.
b. Hold recommendation: This means that the subscriber could consider holding on to the shares of the company until further update and not buy more of the stock
at current market price.
c. Buy at lower price: This means that the subscriber should wait for some correction in the market price so that the stock can be bought at more attractive
valuations keeping in mind the tenure and the objective of the service.
d. Sell recommendation: This means that the subscriber could consider selling the stock at current market price keeping in mind the objective of the
recommendation service.

Feedback:

If you have any feedback or query or wish to report a matter, please do not hesitate to write to us.

MORE ON BODAL CHEMICALS MORE SMART MONEY SECRETS

Is the Short Term Pain a Worry for Bodal Newgen Software Technologies Ltd.
Chemicals? (Smart Money Secrets)
(The India Letter Special Report) Feb 26, 2018

Mar 19, 2018

Smart Money Secrets recommendation report for
Should subscribers buy the stock of Bodal the month of February 2017.
Chemicals after recent correction?

Ashiana Housing Ltd.

Bodal Chemicals: Performance Impacted By (Smart Money Secrets)
GST Jan 27, 2018

(Quarterly Results Update - Detailed)

Smart Money Secrets recommendation report for
Dec 18, 2017
the month of January 2018.
The topline declined by 28.9% YoY due to lower

27
offtake by the textile industry on the back of GST
disruption.
Bodal Chemicals Ltd.
(The India Letter)
Oct 17, 2017
The India Letter recommendation for the month of
October 2017
More Views on News     Recommended Reading
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Copyright © Equitymaster Agora Research Private Limited.
Jagran Prakashan Limited
(Smart Money Secrets)
Dec 22, 2017
Smart Money Secrets recommendation report for
the month of December 2017.
Honda Siel Power Products: Still Awaiting a
Rural Recovery
(Quarterly Results Update - Detailed)
Dec 11, 2017
Good monsoons and a strong product portfolio are
expected to improve Honda Siel's growth prospects
in the coming quarters.
TVS Srichakra: Rise in Depreciation Hits Profit
Growth
(Quarterly Results Update - Detailed)
Dec 8, 2017
TVS Srichakra is gearing up to cater to the
replacement demand in the export markets in the
coming months.
More Views on News     Recommended Reading
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29