Top 3 small cap monopoly stocks (No Competition) :
Already we’ve been discussed the more 3 small cap monopoly stocks in the part 1. Click Here to check out.
1. Neogen Chemicals Ltd
Neogen Chemicals Ltd is one of the India’s leading manufacturer of Bromine based and Lithium based speciality chemicals. Neogen Chemicals Ltd is among India’s leading manufacturers of bromine based compounds, lithium and bromine salts and grignard chemicals.
This company’s portfolio of chemistries, robust quality products and supply reliability making this company dependable supplier of choice for the clients of this company in India and globally. this company has strong presence in 28 countries,
They mainly do their business in following three areas they are Organic Chemicals, Inorganic Chemicals and Custom synthesis and contract manufacturing. This company is one of the small cap monopoly stocks.
1. Organic Chemicals :
In organic chemicals sector they do manufacture organised bromine compounds, Advanced intermediaries, speciality compounds and grignard reagents.
Grignard reagents are speciality organic chemical compounds that can be used in application industries such as pharmaceutical, agrochemical, flavour and fragrance and electronic chemical. this company marketing these products in USA, Europe and Japan.
2. Inorganic Chemicals :
In this segment this company producing Lithium and Bromine based Salts.
3. Contract Manufacturing : In this business segment this company takes care about other companies product manufacturing and also this company mentioning some of their specified customers.
Key Positives :
1. Being one of the few global platers with strong technical expertise.
2. It has extensive experience in niche bromine and lithium based chemistry.
3. Ability to meet stringent quality requirements and impurity specificationsfor products.
4. Regulatory approvals that this company has a lot which can be impossible for other new players.
5. Expanding their capacities to serve the increased demand and new clients
Financials :
Neogen Chemicals Ltd is a small cap company as company’s market cap is 2702 Cr. If you look at the revenue breakup they are earning 81.37% of revenues from organic chemical sector and 18.63% of revenues from Inorganic chemical business sector. and if you look at geographical revenue breakup they are earning 64% from Domestic market and 36% from International market.
If you look at return ratios of the company based on last three years average, ROE is 22.4%, ROCE is 20.3% and Net profit margin is 9.31%. Company has been generated good profit growth of 43.33% CAGR over last 5 years, which is positive for the company.
This company is generating positive cashflows. If you look at the shareholding pattern, the promoters are holding 64.3%, FIIs are holding 4.74% and DIIs are holding 14.0%. Also there is small concerns in this company they are, debt is increasing and stock is trading at 14.7 times to its book value.
Technicals :
Neogen Chemicals Ltd currently trading at 1158. If you look at key supports to add this stock in corrections are, the immediate support is 1025, and the next support levels are 940 and 796. this stock is trading above 50 and 100 DMA, which is positive for this stock technically. and the average PE median for this stock is 49.7.
Conclusion :
As we are looking for looking for long term we can add this stock in every 10% correction as already levels are mentioned in technicals. though stock is trading little expensive we can add this stock in small quantity so that we cant miss this opportunity then if you find any correction further in mentioned levels we can accumulate this stock. This company is one of the small cap monopoly stocks.
2nd Small Cap Monopoly Stocks is:
2. Axtel Industries Ltd
Axtel Industries Ltd is having great excellence and specialized in offering a wide range of process solutions, covering various requirements in the food processing value chain from handling raw ingredients to the final stages of processing. in simple words this company offers the machinery to the big and small companies to process their raw materials in the food industry.
If you look at the client base almost every company in india of FMCG industry are the clients of this company. They are offering their solutions mainly to the industries like Chocloates and Confictionary, Ingredient management system, Size reduction systems, Sieving systems, Mixing systems, Spices processing systems, Steam sterilization systems and customisation processing solutions.
This company offers their processing solutions to the all categories in the food industry that includes snack foods, Bakery & Biscuits, Spices processing, Malted drinks, Aqua feeds, Dairy products, Beverages, Ready to eat foods, extrued foods, Instant mixes and Nutraceuticals.
This company is providing their solutions to the every company we know very well in the industry such as Britannia, Amul, Marico, ITC, Adani Willmar, Everest, Nestle, Haldirams, HUL, Kellogs, Zydus, Pepsico, Tata Coffee, Cadburry, AP foods, IB group, Godrej agrovet and many more. There we can understand how potential this company has to grow. in every big company’s growth story Axtel’s hand will be there in behind. And this company is one of the small cap monopoly stocks.
Financials :
Axtel Industries Ltd is a micro cap company as it’s market cap is Rs 500 cr. This stock is currently trading at Rs 313. and this company is generating 80% of revenues from domestic market and 20% of the revenues from the international market.
If you look at the company’s return ratios of last three years average, ROE is 27.6%, ROCE is 36.4% and Net profit margin they are maintaining is 13.5%. company is generating positive cash flows from their operations and the company PE is lesser than Industry PE. this company is almost debt free and the company has delivered good profit growth of 33.87% CAGR over last 5 years. Promoters are holding 50% of stake in this company.
Technicals :
Key support levels are to add this stock in further corrections we need consider 250 – 280 zone, this range will act as support in further corrections. But as its a micro cap company we should enter with small quantity.
Also look at one more interesting company
3. Galaxy Surfactants Ltd
Galaxy Surfactants Ltd is an India’s largest manufacturer of performance based and specialty care surfactants. this company has more than 250+ products portfolio, which has the wide range. these specialty care products are using in the different range of products, such as home care, personal care, skin care, hair care and other personal products. the personal products are including soaps, detergents, perfumes, cleaning, hair oils, lotions, moisturizers and many others.
This company has the overseas presence as it’s receiving more than 60% of it’s revenues from overseas markets and other 30% revenues are from indian markets. this company has the three strategical manufacturing plants, one India, one in Egypt and another one in USA. Galaxy is one of the small cap monopoly stocks.
if you look at the clients of Galaxy Surfactants the majority of major MNC’s are the clients of this company. and this company maintaining long term relationships with majority of the companies. The clients are including P&G, L’OREAL, Colgate, Emami, Himalaya, Hindustan Unilever, Dabur, ITC, and many other top FMCG companies across the world includes 80+ countries.
Financials:
Galaxy Surfactants Ltd continuously reducing their debt and almost becoming debt free company and continuously posting good profit growth and maintaining healthy return ratios and positive cash flows. if you look at the return ratios of last 5 years variations, the ROE is 22.4% and the ROCE is 23.9%.
Disclaimer : All the stock analysis are purely based on my personal view. so before investing into any stock please do your own research and make a decision about any stock else take an advice from your financial advisor.