DCW LTD. : BSE CODE 500117

DCW IS A DIVERSIFIED manufacturer of basic chemicals, such as:
Caustic Soda, Liquid Chlorine and Chlorine based products such as Trichloroethylene and HCL : Upgraded Ilmenite or Synthetic Rutile
Yellow Iron Oxide , PVC Resin, Soda Ash, Ammonium bi-carbonate
Liquid Bromine and Bromide.

IF YOU ARE READING THIS IN KASHIWALA’S SITE, IT IS ORIGINAL, OTHERWISE IT IS PIRATED.

The company is in existence from 1925 and was earlier known as Dhrangadhra Chemical Works, with plant in Dhrangadhra, Gujarat. The company has come a long way since. The name of the company has been changed to DCW Ltd. and now the company has plants in Gujarat and Tamil Nadu.

The company has a share capital of 39 Crores made up of equity shares of FV of Rs.2.00 each. The company has reserves of over 269 Crores, thus making it a bonus candidate in another 2-3 years.

Promoter’s group is holding 40% shares. Institutions including FIIs are holding about 17% shares and balance is held with the public.

The company has during the year 2007, issued equity shares to FIIs and Promoter Group Companies, at Rs.10.00 premium, viz. Rs.2.00 + Rs.10.00 = Rs.12.00.

The company is consistently in profits and is also paying dividends. The share price of the company touched 52 week low on 16.09.2008.

In my lessons on fundamental analysis, I had stated the following factors to be considered for picking up shares.

1. The company should have regular profits and cash flows.
2. Placement of shares to promoter groups or FIIs at premium is good.
3. At some point of time, a well performing company may touch year’s low.

DCW has qualified on all these fronts. Considering the factors, one can consider picking up DCW shares for a reasonable expectation of 20-25 percent capital appreciation in 12 months.

Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.



KASHIWALA