Digging deep to beat off competition

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: and Pidilite Industries.

They also have research and development facilities set up, which enable them to come out with newer products as needed by the market, and are very dedicated towards the same.

Promoters and concerns

The promoters do have a lot of belief in their projects and continue to hold a stake of 42.54% post issue. The company’s finances have been unstable, to the extent that they have had a rather rapid growth story from being a loss-making organisation up to three years ago, to making a profit of over Rs 4 crore in the last financial year.

For being a manufacturing unit, the company’s income earned through trade has increased by over 3 fold in the last four years, while that earned from manufacturing is just over 1.5 times that of four years ago. This could cause a hindrance to the company unless their new products provide them the turnaround they needed.

The company also has various pending legal proceedings related to central excise, sales tax and labour, which could have a monetary impact of more than Rs 10.50 crore, which is a significant sum compared to the size of their operations.

Also, the extreme competition faced by them from the unorganised sector, which is able to supply materials at lower cost due to exemption from excise duty, could hamper their plans for a capturing greater market share.

Number talk

20 Microns Limited showed a profit of Rs 4.59 crore in the last financial year. This is a major jump for the organisation, which had a loss of Rs. 5.31 crore in the financial year 2003-04. One of the causes for this seems to be the major financial investments the company made during 2003-04.

The company also shows increasing costs and productivity over the last few years, and if they do manage to acquire the mining lands for which they applied and start production of their new product, their financial stability will increase even more. This is a relatively small company that has recently grown and the tell tale signs are very apparent in their finances.