20 Microns Ltd shows Growth Potential

20 Microns Ltd Is a pioneering leader in the industrial minerals sector in India with over three decades of rich experience expertise . It has been at the forefront of revolutionising mineral micronisation and delivering high-quality products and pioneering solutions to diverse global customers across 65 countries.
The company has a diverse product portfolio and encompassing, a wide range of non-metallic industrial chemicals such as calcium carbonate, Talc, mica , quartz, dolomite, natural red oxide along with various other speciality chemicals and functional additives including mineral based fertilisers, construction chemicals, etc.The company has a vast infrastructure of manufacturing facilities spread across the country with a combined manufacturing capacity in excess of 450000 metric tonnes per year. It has 5 captive mines in India with total mining reserves of approximately 170 million tonnes.
The products which it produces are essentially used in industries such as paints, coating plastic , rubber, paper, tyres and ceramics. 20 Microns has an esteemed client base of Berger paints, Asian paints, Kajaria ceramic, Pidilite industries, Larsen and Toubro , Finolex pipes, ONGC, JK Tyres and Akzo Nobel . The company has delivered decent Q2FY25 financial performance with revenue increasing by 20% at ₹2401 million compared to ₹1997 million for the same quarter of last fiscal. The company has posted healthy revenue growth during Q2 FY25 on the back of strong demand across its key products segments. EBITDA for Q2 FY25 stood at ₹308 million while profit after tax increased by 2.5% to reach ₹164 million .While the business performance in Q2 FY25 saw external challenges like the extended monsoon and rising material costs leading to temporary disruptions but the company’s diversified portfolio and robust market presence helped it to mitigate the impact considerably. This has ensured the company on a steady and positive growth trajectory navigating through short-term obstacles. The company management is positive and optimistic for the forthcoming few quarters anticipating progress in demand from the domestic market and hence has projected Q3FY25 increased growth guidance .
The product mix of 20 Microns is 51% towards the paint industry, about 22% for the plastic industry , about 7–8% for the rubber industry and the balance for other smaller industries. The company is diversifying into semiconductors, EV development and batteries. While the development is still ongoing and will take few quarters to develop these kind of niche products, the company is in the research and development phase and working with international laboratories to create the right product for the Indian and international market. 20 Microns incidentally is not making direct products for the semiconductor and the EV industry but developing products which goes into the manufacture of them. The 20 microns stock has fallen from a high of around ₹340 to Rs 248 at present and presents an excellent opportunity to accumulate the stock for long-term gains . Analysts and small cap fund managers are suggesting 20 Microns stock to portfolio investors on the back of better earnings over the next 4 quarters and expect a good price appreciation . Investors should understand that the present market is quite volatile and hence should consider taking expert advice from their financial advisors before committing to the stock .