Dynemic Products - Stong Multibagger

After my last export driven stock pick (SKM EGG) was recommended, I have found this another export driven company, Whose exports form above 70% of the total sales.



Dynemic Products Ltd. is an ISO 9001:2000 & HACCP Certified Company. The company is one of the major manufacturer and exporter in India, offering complete range of Food Colors, Lake Colors, Blended Colors, FD&C Colors & Dye Intermediates.
Dynemic believes in continuous development by incorporating the latest technology to achieve better quality. Dynemic's colours are 100 % safe for human consumption and as per international standards.
From inception, The company has laid emphasis on eco-friendly process development for food color and lake colors etc., with high yield and minimum waste & emission levels.



The food colors manufactured by Dynemic Products have variety of Applications such as:
1) Confectionary
2) Beverages
3) Proceed Food
4) Bakery Products
5) Dairy Product
6) Pet Foods
7) Pharmaceuticals
8) Cosmetic & Personal Care Products
The detailed product level application can be found here:
http://www.dynemic.com/application.html


The company  is leading global manufacturers & distributors of food copies and blended copies & US-FDA certified  FD&C dyes. Dynemic stands among the major Food Colors manufacturers in India and one of the most reliable sources for entire range of Food Colors. The Company is having 3 manufacturing units UNIT-1,UNIT-2 at Ankleshwar and Unit-3 started at Dahej in Feb, 2014. Manufacturing facilities are well equipped, Truly unique in every aspect, the Plant's standards and facilities can match any other, worldwide. Several zones of cleanliness have been defined and adhered to international norms & requirements. Manufacturing facilities include two well equipped plants spread over 50000 Sq Mt of area. Plants are HACCP (Hazardous Analytical Critical Control Point) & ISO 9001:2000, ISO 14001 (Environment Management System) certified.
All the products manufactured by Dynemic meet the regulatory requirement of BIS, EU, FDA, & WHO specification, It also fulfills criteria of Kosher & Halal certification.The company is actively exporting its products world-wide including USA, UK, Germany, South America, Middle East, South East, South Africa, Indonesia, Thailand, Philippines, China, Brazil, Argentina, Chile etc.



I  recently had a word with the management and they clearly said that the performance is sustainable thanks to booming export and increasing demand. Future outlook for the company looks very positive atleast for the next 3 years, A turnaround in global economy and improving consumer spending, The demand for colors have already increased sharply and are expected to increase further. This stocks management  reminds me of a kitex garments management  who has been rewarded heavily.
Sweet Spots: 

• Despite increase in raw materials company posted better results. 
• Cash flow from operating activity is more than doubled in the last financial year. 
• Capacity expansion at Dahej plant going to improve the results further on sales and EPS. 
• Company is having good dividend history. 
• Ethical management, surely they will be rewarded in long term. 
• 
  

Hot Spots: 

• It is in competitive industry, but company products are more standards than others. 
• The industry is stagnant in nature for some times. 

Conclusion: A good company currently trading at around  75 rs. Do remember the way kitex management rewarded. I expect company will continue it's spectacular performance in coming quarters. Hence, it's  a strong buy at the current market price. This Stock can touch 200 anytime in next 2 years, It can even meet this target in 6 months if earnings continue to be solid throughout the period. Short term target of around 100rs.


Edit - Results update . EBIDTA has increased by 37.5% YOY. Operating margin has increased by 103 basis points NPM is also up by 24 basis points. opline increased by 29.3% and net profit by 32.9%. - Great result