Styrolution ABS (name changed from INEOS ABS India Ltd. effective from
March 1, 2012) is a leading manufacturer of an engineering plastic namely styrene monomer, polystyrene and ABS. The company is a 50/50 joint venture between BASF and INEOS ABS formed by combining the styrenic business of two of the largest global chemical companies. In the domestic market, Styrolution is the market leader and holds 60% market share in ABS resins segment and 68% in SAN resins segment.
We expect Styrolutions revenue to post a CAGR of 11.2% over CY2012-14E to
Rs1,223cr in CY2014E on the back of consistent developments by the company.
The EBITDA and net profit are expected to post a CAGR of 11.1% and 11.8%
respectively over CY2012-14E. At OFS floor price, the stock is attractively valued at
5.2x PE for CY2014E earnings and at 23% discount to its last traded price
(20th May, 2013). Hence we recommend investors to Subscribe for Styrolution OFS.
