Stock Pick: 20 Microns, a Stock with Potential

20 microns white mineral mining

20 Microns is considered as a global leader in nano industrial minerals and specialty chemicals. It has recently entered the pharma space by launching herbal medicinal products that heal diabetes, arthritis and heart problems.

Here are its business divisions:

Products for ApplicationNotes
Coating & ConstructionAgrochemicals, Adhesives & Sealants,
Construction, Cosmetics, Printing Inks, Oil Well Drilling,
Foundry, Ceramics, etc.
The company should benefit big time from the affordable housing scheme and the proposed agricultural reforms.
Paper, Plastics and Rubber agriculture, packaging,
automotive, infrastructure, paper, transport, rails, PVC Pipes and cables, and rubber
All that is required is a pick up in manufacturing, which is stagnant bow, but has to turn for the better one day because India is a consuming country
Pharma BrandsIt las launched its own herbal brands that heal diabetes and arthritisThe value will unlock when Patanjali comes up with a public issue
Construction ChemicalsThe company has launched adhesives for the construction industryIt has peers like Pidilite and the like.

Their mining reserves were valued at 320 crores as on 31 March 2016.

The company could not grow big in the past because it was into shallow mining and the government policy did not distinguish between shallow and deep mining, which involves a lot of wastage.

Also, the company’s debt which stood at 150 crores (short and long term) combined with the recessionary conditions to hurt the profits.

But all that is past now, and things are turning around. And there’s no cause for alarm, the company has free reserves of 66 crores on a capital of 17.3 crores (FV 5).

The current Modi dispensation has started recognizing the issue and some steps have been taken to help shallow miners.

As you can judge for yourself, 20 Microns has great potential.

The company also operates more than 10 R & D labs, one per industry

Their exports to Africa and the Middle East are on the rise. In fact, the exports jumped by 25% for the year ended March 2016.

Their subsidiary, 20 Microns Nano Minerals, is coming out with a SME issue of 30 crores, obviously at a premium. This will boost 20 Micron’s cash balances and help them pay off the debt or expand. Whatever they do will be good for the shareholders.

The most important thing is that some interested party is cornering the stock. Check the delivery percentage it is about 80%, which is HUUUGGGGE for a non T2T stock.

Visit the BSE site for financials (NSE may be down :))

I can see huge potential in 20 Microns in the long term. However, do not let my judgement cloud yours. Please do your own research and consult your financial advisor before acting on my blog post.

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