Like Vinati Organics: Prakash Diwan

Prakash Diwan of prakashdiwan.in told CNBC-TV18, "The area of speciality chemicals is getting more interesting, in fact yesterday Omkar Speciality Chemicals announced that they are entering into vitamin business. This is a forward integration with a very technologically challenging way. The chemical guys have proven their expertise on the global arena and luckily this is one area where China doesn't compete very actively. So you still have a decent run ahead."

"What I like about Vinati Organics is that it is a global leader in some of these product segments, so primarily it is into aromatics, monomers, polymers and speciality products. The top three products which constitute almost 88 percent of its revenue are tongue twisters. The first is Isobutyl Benzene (IBB) and second is Acrylamido 2-Methylpropane Sulfonic Acid (ATBS). It's a very well-known chemical and third is Isobutyl (IB). All these products have such wide application and a huge market, for example IBB is used for making ibuprofen, which is an analgesic which is virtually in every pain killer tablet. ATBS has wide ranging applications into industrial water treatment, construction chemicals, paints, adhesives, detergents, textiles and hydro gel medicines. So the kind of applications that these people have are so immense that Vinati has been scaling up strategically even in tough times. Today they have a situation where they have reached 100 percent capacity utilisation for both their plant and globally they are market leaders for IBB and ATBS which is very heartening because ibuprofen, the supply is recognised as best in quality, the purity level is 99.8 percent vis-à-vis global standards of 99.5 percent," he said.

"Their major exports are to the US; 40 percent is to US and another 40 percent to the European Union and 20 percent is to Middle East and North Africa (MENA) market. They have constituted the growth completely out of the exports basket but domestically also they have some leadership but that is not unique because there are other players who also are in that space."

"If you look at the expansion that they are getting into, it is a USD 2 billion expansion and little bit of debottlenecking. It helps them improve capacities from 12,000 to about 15,000 without initial debt. It's just debottlenecking that helps them do that. They are introducing newer products, so that the dependence on these three is not very major, so they will have about 14 products going forward and about 65 clients across 25 countries. Huge leadership position, in the last five years they have grown 50 percent compound annual growth rate (CAGR) on exports, the return on capital (ROC), return on equity (RoE) are in mid 30s and there is hardly any debt. They are trying to retire that. The management is very confident that by FY'17 it will be a zero debt. If you scale up to such a scale where you are a global leader and market share of 65 percent, 45 percent is huge," he added.