Apcotex Industries - Construction Chemicals and Paper Business to Drive Growth; Visit Note :: Edelweiss, report

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We recently met Mr. Abhiraj Choksey, MD, Apcotex Industries (Apcotex) to get an insight about the company’s business. It is a leading producer of synthetic latex and key supplier to diversified industries including paper, construction chemical and tyre industries which mitigates risks. Apcotex’s key strength is in-house development of new products through innovation and R&D. It enjoys a high-entry barrier industry as it already has customer approvals in place. A key risk is the move by tyre manufacturers towards radial tyres, which would hurt its demand. Tyres, however, contribute only ~12% to its sales and would grow on back of exports.

Paper, construction chemical segments to propel growth

Around 45% of Apcotex’s sales are to paper/packaging segment where it primarily caters to the FMCG sector. The company is set to log high double-digit growth, higher than industry riding superior quality products. In construction chemicals, it is a preferred supplier. The segment is expected to post 30% CAGR. To bolster operating margin of the segment, Apcotex launched its in-house brand, ApcoBuild, in Mumbai.

Strong clientele; innovation to continue

Apcotex is well networked with industry giants across diverse sectors, which lends demand visibility. The company proposes to continue investing in R&D to develop new products in latex and remain market leader in the segment.

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https://www.edelweiss.in/research/Apcotex-Industries--Construction-Chemicals-and-Paper-Business-to-Drive-Growth;-Visit-Note/28062.html