Saurabh Mukherjea’s chemical stock pick trades ex-dividend; shares rise

Market


Shares of GMM Pfaudler were trading ex-dividend on the BSE in Friday’s trading session, a day ahead of the record date for its final dividend of 1 per share. The stock was trading nearly a per cent higher to 1,967 per share.

The company last month announced that it has fixed Monday, September 12, 2022 as the record date for the purpose of AGM and determining the Members eligible for dividend on equity shares, if approved at the AGM. Accordingly, the Register of Members and Share Transfer books will remain closed from Tuesday, September 13, 2022 to Monday, September 19, 2022 (both days inclusive).

For the first quarter ending June 2022 (Q1 FY23), the company reported 34% rise in its revenue and its EBITDA margin rose to 13%, on account of better performance in international business, and the company managed to improve its order intake by near 24%.

“Our focus on execution and cost controls have helped us achieve a strong Q1 performance, where we have increased revenues and improved margins. We recorded a significantly higher order intake this quarter adding to our backlog and putting us in a strong position for the coming quarters. While commodity prices have softened over the past few months, energy costs continue to remain a concern,” said its Managing Director Tarak Patel on Q1 results. 

The company recently announced that its acquisition of 100% stake in Hydro Air Research Italia S.r.l., based in Milan, Italy, for a total consideration of 38 crore. The transaction is funded through internal accruals and completed in August 2022.

“The company has completed 7 acquisitions in last 5 years to spruce up its manufacturing capacities and develop adjacencies to capture higher wallet share from existing customers. Despite these acquisitions and 100% stake purchase of Pfaudler’s global business, its net debt to EBTIDA stands at 1.2x, as cash flows improved materially in past 2 years. We expect the company to post sales/adjusted EPS CAGR of 15%/36% over FY22-25E given robust order book of 22 bn,” said brokerage JM Financial in a note this week on GMM Pfaudler.

GMM Pfaudler Ltd is a leading supplier of critical process equipment and systems to the global chemical and pharmaceutical industries. The chemical stock is up about 17% in 2022 (year-to-date or YTD) so far.

Well-known money manager Saurabh Mukherjea is the Founder and Chief Investment Officer of Marcellus Investment Managers. GMM Pfaudler is part of Marcellus Investment’s Little Champs Portfolio.

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