In May this year, the stock shot into limelight with the company announcing its plan to buy-back 10 per cent of its equity in the price range of Rs 15-Rs 30 within 12 months. However, the price has already crossed the limit set by the management to buy back the shares. The buy-back price is likely to revised upwards as the stock is currently trading at Rs 60. The buyback is part of the company's strategy to enhance shareholder value. The company's debt-equity ratio is comfortable and future financing requirements can be better leveraged through debt and internal accruals. Further, the lower equity will boost the earning per share and also the book value, which, in turn, will improve the stock's valuation. Post buy-back, the promoter's stake will go up to 56.5 per cent in the total paid-up equity of Rs 9.97 crore. During the year ended March 31, 1999, Tanfac recorded a 27 per cent growth in net profit to Rs 7.41 crore as against Rs 5.85 crore in 1997-98. Sales turnover for the year was Rs 64.21 crore, up 14per cent from Rs 56.30 crore a year earlier. Gross profit increased from Rs 10.21 crore in 1997-98 to Rs 11.94 crore in 1998-99, registering an increase of 17 per cent.

The board of directors has recommending a 17 per cent dividend for the year. A joint-venture between TIDCO and Aditya Birla group companies, Hindalco and Grasim, Tanfac Industries commands a market share of over 60 per cent in the high bulk density aluminium fluoride. Besides aluminium fluoride, it is also engaged in the manufacture of products like AHF acid, cryolite sulfuric acid, etc. Substantial parts of sulfuric acid and AHF acid is meant for captive consumption. The diversification into organo-fluorine chemicals lik fluorobenzene, DCFB, difluoro, acetophenone last year has opened a huge domestic market as most of these products are import-substitutes. The company has roped in Dalian F. Chem of China for technological assistance.

In the current year, new products are expected to contribute significantly to turnover and profits. Turnover is expected to be nearly Rs 75 crore with a net profit of around Rs 9 crore. This would yield an attractive earning per share of Rs 9 and the current market price of Rs 60 discounts the expected earnings with an attractive PE of less than 7.