Privi Speciality soars 36% in 2 days on JV with Switzerland-based Givaudan

Shares of Privi Speciality Chemicals hit a new high of Rs 1,799, up 13 per cent on the BSE in the intra-day trade on Monday, having rallied 36 per cent in the past two trading days, after the company and Givaudan SA signed a joint venture (JV) agreement for manufacturing highly specialized aroma chemicals for Givaudan.

Privi Speciality Chemicals (PSCL) is lndia's largest manufacturer and exporter of aroma chemicals. Meanwhile, Givaudan, a Company incorporated in Switzerland, is the global leader in fragrance creation.

"A new greenfield production facility will be built in Mahad, where Privi's main manufacturing plants are located. Privi will hold 51 per cent of the equity capital of the JV Company. A subsidiary company with proposed name 'Prigiv Specialties Private Limited' (subject to availability) shall be incorporated," the company said in a release.

In the segment of aroma chemicals based on Pinene chemistry, Privi is amongst the largest manufacturing capacities globally. Privi's growth is fulcrumed on attaining and maintaining long term sustainability.

Givaudan is a Swiss multinational manufacturer of Flavours, Fragrances (F&F), and Active Cosmetic lngredients. lt is the number one F&F company of the world, having worldwide operations across multiple countries. Givaudan is engaged in the business of development, manufacture and marketing of flavours, fragrances, active cosmetic ingredients, and natural extracts used by customers in their finished products in the food and beverages and household and personal care industries.

With the past two days' rally, the stock of PSCL has more-than-doubled (up 101 per cent) in the past three months, as compared to a 8.5 per cent rise in the S&P BSE Sensex.

In May 2021, the rating agency Crisil Ratings had reaffirmed its ‘CRISIL A+/Stable/CRISIL A1’ ratings on the bank facilities of PSCL. "The ratings continue to reflect PSCL's strong business risk profile, driven by an established market position in the bulk aroma chemicals industry, long-standing customer relationships, strong relationship with suppliers, and improving profitability and asset utilization," CRISIL had said in its rating rationale.

The ratings also factor in an above-average financial risk profile because of a comfortable capital structure and adequate debt protection metrics. These strengths are partially offset by exposure to any sudden and sharp fluctuation in foreign exchange (forex) rates, volatility in prices of raw material, particularly crude derivatives, and large working capital requirement, it had added.