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ASAHI SONGWON COLORS LTD (138)


ASAHI SONGWON COLORS LTD (532853& NSE as “ASAHISONG”) (138)

On 18th November 2013, we had recommended this stock at Rs.69, after our recommendation it zoomed to Rs.192 levels on 2nd November 2014. After demerger again we are recommending this stock.
Asahi Songwon Colors Ltd.   is in the business of manufacturing pigments.  Pigments are basically colourants, adding colour to everything  around us, namely ink, paints, plastics, textiles, rubber etc. ASCL was promoted by Mrs. Paru M. Jaykrishna, having rich business experience in the field of manufacturing Pigments & Chemicals and Travel Industry. Mrs. Paru M. Jaykrishna started Pigment Manufacturing activities in 1994 by setting up plant for manufacturing Pigment Green – 7 at Kadi, Mehsana in Gujarat.The company also exports its products to the United States, Europe, and the Asian countries.
Company has an equity base of Rs.12.27crore that is supported by reserves of around Rs.105.71crore which is 8.61 times higher than the equity and has a share book value of Rs.120.24 and price: book value ratio is just 1.15, which is highly impressive. The promoters hold 62.28% while the investing public holds 37.72% stake in the company. 
Financial Performance

Q1FY16
Q1FY15
FY15
Sales
58.02
81.20
240.47
Profit Before Tax
7.64
6.60
25.96
Tax
2.60
2.38
8.65
Profit After Tax
5.04
4.22
17.70
EPS
4.11
3.43
14.42
For Q1FY16, sales have decrease 40% to Rs.58.02crore (because of demerger of the pigment green division of Asahi Songwon to AksharChem (India) Ltd. The swap ratio was five equity shares of AksharChem (India) of ₹10 each fully paid-up for every 26 equity shares of Asahi Songwon Colors). Despite of lower topline & rise in income tax, PAT has jumped by 19.43% to Rs.5.04crore. Q1FY16 EPS stood at Rs.4.11. The scrip is trading at P/E multiple of just 9.3.
Company is regularly paying dividend to its shareholders. It has paid 35% dividend for FY14 & declares 35% dividend for FY15. Stock is still available with dividend right. 
Stock is looking explosive for investment. Investors can buy this stock with a stop loss of Rs.125. On the upper side, it will zoom to Rs.165--170 levels in the medium term while stock may zoom up to its all-time high rate of Rs.192 in the next 8--10 months.



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