COMPANY OVERVIEW:
BASF India got started way back in 1943. Company manufactures and markets expandable polystyrene, tanning agents, leather chemicals and auxiliaries including specialized metal complex dyes, leather dyes, textile chemicals, dispersions and specialty chemicals and acrylic polymer in primary forms and corp protection chemical.
BASF India is also involved in the trading of chemical including dyestuffs and related textile auxiliaries and renders technical services to various industries.

Subsidiary:
BASF India Ltd
BASF Coating Private Ltd
BASF Styrenics Private Ltd
BASF Polyurethanes India Limited
BASF Construction Chemicals (India) Private Limited
BASF Catalyst India Private Limited
BASF Asia Pacific (India) Private Limited

Product Name	Sales (In crore)	% Total Sales
Pesticides (Formulations)	Rs 263.04	23.6%
Chemicals & Auxiliaries (Leather)	Rs 262.04	23.6%
Agrochemicals (Trading Product)	Rs 188.40	16.9%
Polystyrene Expandable(Styropor)	Rs 131.32	11.8%
Leather Auxiliaries & Fin Agents	Rs 111.87	10%
Chemical (Leather Auxiliaries)	Rs 83.80	7.5%
Commission	Rs 74.25	6.7%

INDUSTRY OUTLOOK:
Indian chemical industry is growing leaps and bounds and is expected to be $150 billion by 2013. It is expected to grow at 10% annually. The main reasons for growth are lower cost advantages, increase in substantial domestic demand, improving infrastructure and availability of quality talents. Per capita consumption of chemical in India is 1/10 of the world average per capita consumption.

INVESTMENT RATIONAL:
Company’s top line has consistently grown over the period of four years at CAGR of 16.5% and bottom line has grown at CAGR of 24.5%.
Company is almost debt free.
In FY-10 company has cash balance of Rs 825 crore.
As many MNC are now going for delisting their entities in India this could be another trigger for the stock.
Merger of Ciba India to be completed this with BASF rationalize the operation of BASF India and synergy will help in increasing the margins.
Agri business is important part of BASF, a good monsoon will increase the revenue of the company.
Company is taking various steps to contain the cost which is going to increase the margin in the coming quarters.
Chemical industry in India is expected to grow at 10% annually.

	NO. OF SHARE	% OF TOTAL
PROMOTERS	29227576	71.70%
INSTITUTION	3169306	7.80%
GENERAL PUBLIC	8373114	20.500%
GRAND TOTAL	40769996	100.00%

	31/03/07	31/03/08	31/03/09	31/03/10
TOTAL INCOME	878.67	911.89	1124.15	1394.14
EXPENDITURE	-788.19	-804.01	-999.49	-1215.85
PBDITA	90.48	107.88	124.66	178.29
DEPRECIATION	-10.87	-13.6	-15.16	-26.08
PBIT	79.61	94.28	109.5	152.21
INTEREST	-1.51	-1.28	-1.49	-0.84
PBT	78.1	93	108.01	151.37
TAX	-28.01	-33.63	-39.37	-54.56
PAT	50.09	59.37	68.64	96.81
*Extra Ordinary Item is excluded from the calculation.

Key Highlights:
Total Income grew at CAGR of 16.5% in the last four years.
PBDITA grew at CAGR of 25.1% in the last four years
PAT grew at CAGR of 24.5% in the last four years

	31/03/07	31/03/08	31/03/09	31/03/10
EPS	12.2859958	14.56218	16.8359104	23.7454
PBDITA MARGIN	10.2973813	11.83037	11.0892674	12.78853
NPM	5.70066123	6.510654	6.10594672	6.944066
INTEREST COVER	52.7218543	73.65625	73.4899329	181.2024

Key Highlights:
EPS has increased in the last four years from Rs 12.2 in FY07 to Rs 23.75 in FY10 at CAGR of 16.5%.
PBDITA Margin improved by almost 250 basis points to 12.7% in FY10 over the last four years.
NPM improved by 120 basis points to 6.95% in FY10 over the last four years.
Interest Cover has increased from 52.7 in FY07 to 181 in FY10.

	Q4FY09	% CHANGE	Q4FY10
TOTAL INCOME	203.64	71.49872324	349.24
EXPENDITURE	-190.2		-319.82
PBDITA	13.44	118.8988095	29.42
DEPRECIATION	-3.68		-8.51
PBIT	9.76		20.91
INTEREST	-0.25		-0.2
PBT	9.51		20.71
TAX	-3.6		-10.22
PAT	5.91	77.49576988	10.49

Key Highlights:
Total Income grew by 71.5% in Q4FY10 to Rs 349.25 crore on YoY basis.
PBDITA grew by 118.9% in Q4FY10 to Rs 29.5 crore on YoY basis.
PAT grew by 77.5% in Q4FY10 to Rs 10.5 crore on YoY basis.

VALUATION &OUTLOOK:
We expect FY11E EPS to grow to Rs 35, as the integration with Ciba India will get completed this year. The synergy will help in increasing revenue and margin. At cmp Rs 422 the stock is trading at 12X of FY11E EPS. The PEG ratio comes at 0.5. The ideal PEG ratio is 1. If we value the company below the ideal ratio at 0.7, the fair value of the stock comes at Rs 612. So there seems to good upside from this level.
Company has good history of dividend payout, this limit the downside in the stocks.

CONCLUSION:
Investors with 6-8 month view could start accumulating the stock. There is considerable upside in the stock, downside is limited. There are lot of positive and good news are expected on this stock in coming months.