Vinyl Chemicals is in the business of trading Vinyl Acetate Monomer. The company has reported erratic revenues and profits over the last five years although revenues haven’t declined materially from levels seen five years ago. It reported marginal profits of 5 lacs on revenues of 152 crores in the last financial year and operated with no net debts as at 31 st March, 2011. The business is subject to volatile price fluctuations in the product as well as adverse foreign exchange rate movements in its import activities. The company doesn’t own value-generating assets (e.g. manufacturing facilities etc.) and hence, has limited barriers to the entry of new traders in its product. Management started declaring dividends in 2010 but it is to be seen whether they can maintain this during times of business downturns.
An Individual Investor's Perspectives On The Indian Financial Markets