In any case, the company is expected to benefit from the fall in prices of molasses which is the key raw material for making monoethylene glycol (MEG) and rising oil prices. This benefit is expected to be reflected in Q4FY07 revenue.
The molasses prices have fallen by 40-50 per cent in the past one year. India Glycol is the only manufacturer of MEG other than the Reliance group and is the largest producer of ethylene oxide (EO) derivatives in India.
These products are used in various end-use industries such as textile, agrochemical, oil & gas, personal care, pharmaceuticals and detergent etc. Going by valuations, the stock is trading at a reasonably good P/E multiple of 8.46 times its trailing earnings.
