Fine Organic Industries Ltd (FOIL) is the largest manufacturer of oleochemical-based additives in India and a strong player globally. FOIL produces a wide range of specialty plant derived oleochemical-based additives used in food, plastic, cosmetics, paint, ink, coatings and other specialty application in various industries. As at March 31, 2018, company had a range of 387 different products sold under the ‘Fine Organics’ brand.

In terms of valuation, pre- issue works out to 22x of annualized FY18 EPS of `35 (at the upper end of the issue price band). We believe FOIL is strategically placed owing to (a) market leadership in Slip additive, (b) maintaining healthy operating margin in the range of 18-22% and (c) diversified client base along with geography mix. However, due to lack of immediate triggers in revenue growth owing to near to utilization level of current capacity and no major capacity additions in near future, we have a NEUTRAL view on the issue.

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