Shares of India Glycol hit a record high of 1,112 rupees, on the back of a 1 percent rise on the Bahrain Stock Exchange in Friday’s trading on the back of a nearly threefold jump in trading volume. In the past three days, the commodity chemical company’s inventory is up 16 percent after an update of its grain distilleries.
At 10:38 am India glycol was trading 8 per cent higher at Rs 1,094, compared to a 0.39 per cent rise on the S&P C Sensex. 620,000 shares of the combined stock were traded on the NSE and BSE stock exchanges.
On Wednesday, March 29, India Glycols informed that after the successful installation of the grain distillation unit in Gorakhpur, trial run is underway and the same will be operational by May 15, 2022.
Moreover, the installation of the grain distillation unit in Kashipur is at an advanced stage and is likely to be commissioned by July 15, 2022. The company said the delay is due to the Covid-19 pandemic.
Last month, the stock outperformed the market with a 47 percent rise, compared to a 4.6 percent rise in the S&B Sensex Index. Last year, the stock rose 155 percent, versus a rise of 17.6 percent on the benchmark.
The company reported resilient performance for the first nine months ending December 2021 (9 months of FY22) on the back of good rebound in BSPC (Bio-Specialties and Performance Chemicals) and good growth in PS (Project System) and despite the unprecedented shutdown and escalation in prices Feedstock and energy. Margins are at 7.74 percent in line with the longer term average despite these strong winds.
Rating agency India Ratings and Research (Ind-Ra) believes there is strong demand potential for ethanol produced by India Glycols with the government’s goal of achieving 20% ethanol blending by 2025 (from current levels of 7%-7.5%). According to management, the distilleries’ capex has revenue potential of INR 5 billion to INR 6 billion with robust EBITDA margins of over 20 per cent.
with a significant decrease in debt; Recovery in demand in the chemical sectors and limited impact of divestment on earnings at the expense of income streams from the joint venture, Ind-Ra expects India Glycols credit metrics to improve in the near term, though the company remains in capital at around Rs 320 crore during the fiscal years 22 – Fiscal Year 23 to establish a grain-based distillery.