Nov 3, 2017

Dhunseri Petrochem ltd has planned capex. Turnaround. Structural Change and new vertical. Trading too.

A turnaround company. A changing company. Big expansion plan. PET. Food. Trading.
Dhunseri Petrochem Limited (DPL) was incorporated on 11.5.1916 with the name Dhunseri Tea Co. Ltd. The Company’s first business was cultivation and production of tea at its tea estates in the State of Assam.

Later, the Company acquired the Bottle Grade PET Resin business of South Asian Petrochem Limited at Haldia in the State of West Bengal in terms of a Scheme of Arrangement with effect from 1.4.2009 and the name of the Company was changed to Dhunseri Petrochem & Tea Limited, the Company having two operating divisions i.e. Petrochem & Tea.

Find here more about Dhunseri Petrochem.

June quarter result was superb. Reason:
Upto the previous year ended March 31st, 2017, the Company was engaged in treasury operations and had a single reportable segment. With effect from the current quarter, the Company has been involved in trading business and accordingly, "Trading" and "Treasury Operations" have been identified as Operating Segments.

Company delivered Sept quarter (2017) result in same line. It is better.

June, 2017 Quarter result segment:
Sales (Rs million):
  Trading: 1,916.85
  Treasury Operations: 87.89

Profit (Rs million):
  Treasury Operations: 84.15
  Trading: 5.32

It produces PET resin which is used in many application. Last year, it has signed JV which is 2nd after Reliance Industries. It is planning to enter into food business.

The company, which is currently engaged in trading business, will focus on the food business moving forward.

According to CK Dhanuka, chairman, IVL Dhunseri Petrochem, Tastetaria, its fully owned subsidiary has signed a franchisee agreement with Uno Pizzeria & Grill, known for its Chicago style deep-dish pizza.

Under the franchisee agreement, the company plans to set up three full service dine-in restaurants by March 2018. “We will add 60-70 outlets in the next five-to-seven years,” he said.

The company had recently acquired Twelve Cupcakes - a niche patisserie chain in Singapore. The venture, which was making losses, has now turned profitable and is on an expansion mode, Dhanuka said.

The company is also exploring the possibility of getting into manufacturing of cheese. “There is a good demand for branded cheese. We are in negotiations,” he said.

Update: Date: Feb 14, 2018
Dhunseri Petrochem is a cash rich company is trading at very low valuation. MCap of Dhunseri Petrochem is Rs 550 Cr and Reserver is Rs 1065 Cr.

Today I saw that General Insurance Corp of India (GIC) holds 1.28% stake.
West Bengal Industrial Development Corporation Ltd holds 2.61%. Also,
The New India Assurance Company Ltd holds 2.69% in the company.