Kesar Petroproducts, a penny stock with good fundamentals

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siddharth
Posts: 10
Joined: Mon May 11, 2020 12:45 am

Kesar Petroproducts, a penny stock with good fundamentals

Post by siddharth »

Today, i want to recommend a penny stock named Kesar Petroproducts. It has an established business and strong fundamentals and even a moat in the form of an entry barrier.

It is quoting at cheap valuations of only Rs. 4.09 even though it has a market capitalisation of Rs. 39.5 crore.

Kesar Petroproducts is a dyes & pigment player.

It is one of the leading manufacturer of CPC Blue crude and its downstream products in India, and a is a remarkable turnaround story. The company has 15% market share of the Indian CPC market.

The company is vertically integrated with CPC Blue being the primary raw material for pigment blue.

Kesar is moving up the value chain with Alpha Blue, Beta Blue and dye intermediates that commands a higher margin.

Growth in dyes segment is driven by textiles, leather and food. Pigments market is propelled by printing ink, paints and coatings.

China and India control over 50% of the market and since environmental norms are limiting China's growth and raising the cost of production, Indian players are in a vantage position.

The company has no capex plans and is sitting on idle capacity and should reap the benefits of operating leverage, going forward.

Intensive environmental regulations, high water requirements, difficulty in obtaining new licenses and client stickiness creates entry barrier in the business.

Kesar Petroproducts has a lot of moats because of which the operational performance has been very impressive.

Views invited from other boarders.

Disclosure : invested.

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RKD
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Posts: 15
Joined: Sun May 10, 2020 6:30 pm

Re: Kesar Petroproducts, a penny stock with good fundamentals

Post by RKD »

Kesar is up 2% today even though Nifty is heavily down. Looks like the stock is attracting interest from big investors.

Saurabh
Posts: 5
Joined: Mon May 11, 2020 10:56 am

Re: Kesar Petroproducts, a penny stock with good fundamentals

Post by Saurabh »

During the Bull run, Kesar Petroproducts gave a return of over 3,000 per cent in just 2 years.

The scrip surged from Rs 1.16 on July 28, 2014 to Rs 38.20 on July 27, 2016.

The effect of this multibagger journey is that an investment of Rs 1,000 in Kesar Petroproducts was worth Rs 32,987.91.

Unfortunately, after that, during the Bear market, the stock has lost heavily. Will it recover even part of its glorious days?

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