In a conversation with Zee Business Managing Editor Anil Singhvi, Market Analyst Sandeep Jain recommended investing in Panama Petrochem Ltd for good returns.

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"Panama Petrochem is a good quality company and has surprising fundamentals. Changes have been observed in the fundamentals and a positive improvement has been seen," he said.

 

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The market analyst added that the company manufactures specialty petroleum products and is a user industry- printing, textiles, rubber, pharma, cosmetics, power, among others. Overall, the company is working well and has good valuations, he said.

Talking about the customer base, the market analyst said that the company is very old and has a strong customer profile. He said it has 4 plants which are strategically distributed that is 4 plants at different locations as they cater to various countries.

 

He informed that the company has also reduced its debts to almost Rs 65 crore and the company manufactures around 80 product variants of specialty petrochemicals and has a capacity of 2,30,000 metric tonnes.

Talking about the valuations, Sandeep Jain said the company is of around Rs 1400-1500 crore, stocks are at a multiple of 10 PE, return on capital employed is of 34 while return on equity is of 27 percent.

Profit of the company in the last 5 years is of CAGR 40 percent, for 3 years it is 30 percent and sales growth is around 14-15 percent. So, if we see the PEG ratio then it is only 0.27, and in March 2020 the company had a pact of 6 crore and in March 2021 it is of 7 crore.

He added that FIIs have invested in the company and some renowned investors also hold the stocks of the firm. The market analyst said that the rating of the company is also good and therefore he advised the investors to invest and buy the shares of the company at this level and said that it can reach the level of 300 in the coming days.