Dyes and chemicals exporter Kiri Industries has been seeing momentum build sharply over the past few months. Share price has more than doubled to Rs. 630+ from the mid-200s six months ago. The company, which claims to have clients across 50 countries, is gaining from structural changes in the global market that are benefiting its business. This sector tends to be higher margin, and KIri Industries has delivered double digit EBITDA margins in the past few quarters. It also has a high combined DVM score.
One of the changes that has taken place globally favoring Indian companies in the dyes space is China's crackdown on polluting industries, which includes the chemical dye companies. As a result, multiple Chinese players have seen factories shut down, or have completely closed down their business.
Kiri is also gaining from changes domestically in terms of policy: unorganized sector players are finding it harder to compete in the post-GST environment, as well as regulations growing stricter on the treatment of effluents and pollutants. The costs of implementing such controls and processes are high, and this has allowed Kiri to gain market share, according to management, versus unorganized players.