Today, I came across a wonderful scrip Sadhana Nitro (SNL) which has already delivered 1,324% returns in a year and 10,150% return in 5 years. Such magnificent returns look like a glossy dream for investors where people chase for 1X or 5X growing stocks.

Let us get some brief about the company

SNL is engaged in manufacturing of chemical intermediates, heavy organic chemicals and performance chemicals. 

Sadhana Nitro is in the industry for last 44 years. Their products have various industry application such as paper, pharmaceutical, agrochemical, thermal dyes, a light stabilizer, aerospace, dyes and hair dyes. SNL supplies its products to various companies all over the world.

  • Sadhana Nitro is mainly Engaged in the manufacture and marketing of Nitrobenzene ( C6H5NO2), its downstream derivatives and other intermediaries for various applications. (Azo dyes, direct dyes, reactive dyes, fluorescent brightening agent, colour dyes, leather dyes, hair dyes, agrochemicals, pharmaceutical and fibres) , aniline , light stabilizer , textile printing oxidizing agent , electroplating agents , etc
  • Derivatives and products other than Nitrobenzene and meta aminophenol are 1. 33DDS ( dinitro diphenyl sulphane ) 2. M/Acid ( metalinic acid ) 3 . Aniline 2,5 disulphonic acid , 4 . Aniline 2,4 disulphonic acid 5.btca ( butane 1,2,3,4 tetra carboxylic acid ) 6. Dibutyl ke to acid 7. 3,3 diamino diphenyl sulphide 8. Sodium meta Nitrobenzene sulphonate 9 . Colour formers 10. N,N diethyl meta aminophenol
  • In order to provide immediate and assured service to the vast European clientele, Sadhana Nitro has also set up a 100% subsidiary Anuchem b.v.b.a. in Antwerp, Belgium.

Company Financials

Here is a snapshot of key information related to Sadhana Nitro.

Important points are highlighted 

Some important points to note

  1. Sadhana Nitro is a small cap company working in chemical space.
  2. It has an excellent promoter holding and promoter have been buying from the open market in last 1 year.
  3. It has shown excellent profit growth of 3000% which may not sustain for a longer time.
  4. Return on equity and capital employed is very good and pass all criteria for investment.
  5. The company is virtually debt free and has share capital of only 9 crores.
  6. The last but still worthy promoter has not pledged any shares, and they released all shares from pledging in Q1 18.

Financial Results

Important things are highlighted 

In the recent time from Dec 2017, the company has been posting excellent results which caused a sudden rush in prices of the stock.

Key Developments in 2018

  1. Name change evoting approval ( Sadhana nitrochem to SNCL limited)
  2. Acquisition of business of Spidigo Net Private Limited ( paid-up capital, rs 100000/- turnover 9.985 crores, category: internet service provider )
  3. Out of the total holding of Manekchand Panachand Trading Investment Co Ltd (promoter of the SNCL), 55lac equity shares of
    SNCL were pledged. On clearance of dues corresponding to the pledge, the said shares were released on April 24, 2018. The co had informed bse on May 4, 2018. Reason for the release of encumbrance is repayment of the loan to the pledge.
  4. Strix wireless system private limited ‘s shares acquisition evoting ( paid up capital of 3920010 /- turnover of approx .9973 cr for 2016-17 ) : category: wireless and networking technology hardware and software.  Loans and securities wrt section 186 of companies act 2013 http://www.rna-cs.com/insight-on-section-186-of-the-new-companies-act-2013/
    Additionally, an investment limit of 25 cr over and above the ceiling. 
  5.  Solar  power plant with battery backup costing 4.28 cr acquired from PAE renewables Pvt limited 
    http://www.sncl.com/newpdf/Out%20come%20of%20%20BM%20100317.pdf 

In last AGM Aug 2018, Sadhana Nitro’s management is very confident about its strong order book and expect to maintain the same or higher growth trend. The cost of every stage of operations with the increasing level of operations resulted in product cost improvement.

Past Returns

Promoter acquiring shares from Open Market

As of Sep 2018, Sadhana Nitro’s share is locked in back to back Upper Circuit. I will keep the company on radar and try to dig more relevant information which can provide additional information on its future growth.

Company website

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