Dipna Pharmachem Ltd. engages in the trading and distribution of pharmaceutical raw material and chemical formulation products. Its raw material includes active pharmaceutical ingredients and excipient chemical formulation products. It also sells chemicals on commission basis. The company was founded on July 19, 2011 and is headquartered in Ahmedabad, India.

India

Dhunseri Ventures Limited

Basic Materials

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been moderate and on par with its peers. On average, the company pays dividends annually. 

DVL.NS reported revenue of INR 6 994mn in the last 12 months, up 183% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 31% from FY23 to INR 72.96.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 13ppts and its growth accelerated by 1ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 38.5% in the last 12 months, a decline from 78.2% in FY23. 

Dhunseri Ventures Limited reported a return on equity (RoE) of 8.3% in the last 12 months, up from 7.0% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 6.3% in the last 12 months, an increase from 5.2% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 6.5%, below the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.6 in the past several years. This ratio implies a strong shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

DVL.NS has very poor trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, robust profitability, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, excessive margin volatility, and poor working capital management.

In highly turbulent market conditions, DVL.NS is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, DVL.NS is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to average. 

From both historical and forecast perspectives, the stock is slightly overpriced compared to similar stocks. Specifically, the stock is 'cheap' on P/E, undervalued on EV/EBITDA, overpriced on P/FCF. 

Dhunseri Ventures Limited

₹ 374.6

3

Dhunseri Ventures Limited

₹ 374.6

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

₹ 374.6

About

About

About

About