Promoters of Ambani Organics Limited Company are: (i) Mr. Rakesh Shah, aged 48 years, is the Promoter and Managing Director of the  Company. He is an undergraduate. He joined the Board of Directors of the Company in the year 1996 and has since been instrumental in the growth of the Company. (ii) Mrs. Apooni Shah, aged 49 years, is the Promoter, Chairman and Whole Time Director of the Company. She completed her Bachelor of Commerce in the year 1989 from the Mumbai University.

Let us understand the business of the company:  1. They procure various raw materials required for the manufacturing of specialty chemicals from various companies in the domestic and international market. 2. Then they manufacture 100 different specialty Chemicals from it which is used in Textiles, Paints, Paper, Adhesives, Construction and Chemical Industries with the help of two manufacturing plants at Tarapur MIDC, MH. 3. Then they export these Speciality Chemicals in the domestic as well as overseas market. Let us understand the risk in the business 1. As on 31st March 2018, the Company has significant debt of 16 Cr on standalone basis. Any increase in debt further may have direct impact on bottom-line due to increase expenditure on interest cost. 2. The cost of raw materials constitute around 90% of total expense in FY18 which is quite significant and any increase in prices of such raw materials may have significant affect in bottom-line. Though company in the past has passed on the increase raw material price to the customers but still we believe it may pose issue in future ,as the % cost of raw material is quite significant. 3.  They do not own the manufacturing plants. The Plants are taken on lease from its subsidiaries which is renewed on annual basis. Any issue with lease agreement may have significant affect on business in future. 4. The Company has installed capacity of 2000 MT as on FY18 but its utilization stands at only 47% which we believe is highly under utilized. 5. The two subsidiaries of the company has posed losses in last three financials years i.e FY16, FY17, and FY18, though we believe the losses are not significant but if this continues in future it may affect their consolidated performance. 6. The product segment in which the company operates is highly competitive in India, as a number of large manufacturers compete for customer acceptance. So company has very less moat.

1. Assets and Liabilities Key Parameters
Year	Asset(lacs)	Liabilities(lacs)	Net Worth(lacs)	Book Value	D/E [<1.5]	RONW	Receiveable days
FY14	2,531.88	2,062.12	469.76	17.08	4.4	7%	115
FY15	1,902.19	1,617.65	284.54	9.30	5.7	-86%	75
FY16	3,004.24	2,670.42	333.82	8.76	8.0	-12%	134
FY17	3,830.50	3,416.16	414.34	10.87	8.2	20%	112
FY18	4,777.78	4,181.14	596.64	15.66	7.0	31%	102
Post Issue			1433.52	28	2.9	12%

2. Profit n Loss Key Parameters
Year	Revenue(lacs)	PAT(lacs)	EBITDA Margins	Profit Margins	Outstanding Shares(lacs	EPS
FY14	3419.69	32.35	7%	1%	27.501	1.18
FY15	3765.77	-243.99	-5%	-6%	30.607	-7.97
FY16	3291.4	-38.89	6%	-1%	38.107	-1.02
FY17	5289.85	83.17	7%	2%	38.107	2.18
FY18	6558.15	182.3	8%	3%	38.107	4.78
Post issue					50.787	3.59

3. Cash Flow Statement(all figures in lacs)
Particulars	FY18	FY17	FY16	FY15	FY14
(i) Net Cash Generated from Operation	90.97	401.47	-157.91	43.17	215.76
(ii) Net Cash Generated from Investment	-133.45	-198.2	-623.44	179.29	-58.55
(iii) Net Cash Generated from Financing Activity	43.54	-242.28	869.68	-217.09	-157.41
(iv) Total[ (i)+(ii)+(iii) ]	1.06	-39.01	88.33	5.37	-0.20
(v) Cash and Cash Equivalents at the Beginning of the Year	74.15	113.17	24.84	19.47	19.68
(vi) Cash and Cash Equivalents at the end of the Year	75.21	74.15	113.17	24.84	19.47

Key Notes: a) The Revenue is growing at CAGR of 17.68% from FY14 to FY18. b) The PAT is growing at CAGR of 54.01% from FY14 to FY18. c) The Annualized EPS for FY17-18 would be 3.58 d) P/E(post issue)= 18.38( reasonably priced) at Cutoff price of 66. e) P/B(post issue)= 2.33 at cutoff price of 66. f) The company has Short term debt of 12 Cr and Long Term Debt of 2.8 Cr as on FY18. The company has total debt of 14.8 Cr against 6 Cr equity. So D/E>2- Red Flag g) Mcap/Sales(ideally <2)= 0.5 on FY18 sales- Green Flag. h) The Company is facing challenges to improve the EBITDA Margins which are reeling around 8% in last 5 years. Apart form this,the Profit Margin of the company is also very low at around 3%. For any business to grow the margins has to improve otherwise the excellent growth in revenue gets overshadowed.So going forward improving the margins would have been a big challenge for the company. i) The Company has inconsistency in maintaining a positive cash flows in last 5 years- Red Flag j) The company suffered losses in FY15 and FY16 but that is due to major fire broke out at one of their manufacturing plant. k) High Receivables days in the last 5 years is another negative point for the business.- Red Flag

Ambani Organics Limited IPO Rating by InvestorZone team =4/10; 1-5: Fair 5-7: Good 7-10: Excellent We believe stagnant Profit & EBITDA margins and high D/E may impose problems in future.

Ambani Organics Limited 801, 8th Floor, 351 ICON, Next to Nataraj Rustomjee, Western Express Highway, Andheri (East), Mumbai – 400 069, Maharashtra. Phone No. +91 22 2683 3778 Fax No. +91 22 2683 3778 Email  info@ambaniorganics.com Website www.ambaniorganics.com