Hello Sir,

Hope you are doing well.

On 29th Jul’23, Saturday evening, we released our new stock recommendation for our Alpha and Alpha + Members.

As per the management, for FY 24 they are hoping to achieve 30% + growth in sales at around Rs 1,200 crore with EBITDA margins of around 18-20%.

If the management is able to achieve the above numbers, the operating profit of the company will see a jump of ~75% in FY 24 over FY 23 (on standalone basis).

Here are some other interesting details about the company:

  • Growth – The company has done well with stupendous 8x growth in sales and more than 5x growth in PAT in the last 5-6 years
  • Specialty Chemical – The company deals in 3 major chemistries and commands leadership in India with major market share in 2 of those
  • Product Diversification – Since FY 17, through organic and inorganic routes, the company has diversified its product mix which has enabled it to serve multiple industries
  • Import substitute products – The company has an import substitution opportunity persisting for several of its products. It recently introduced 3 products in the market which are mostly being imported in India with limited availability domestically
  • Expanded aggressively – Since FY 19, the company has spent Rs 550 crore + on enhancing capacities and introducing new products to the portfolio. Going forward, the CAPEX spend is likely to be lower with the focus on enhancing efficiencies at the existing plants
  • Debt – With strong cash flows from operations, the company reduced net debt by around Rs 90 crore in FY 23. Further, the management doesn’t intend to raise more term loans in near term
  • Promoter’s skin in the game – Promoters hold a major stake in the company. Further, as per our analysis, entities related to promoters hold another 20% + stake in the company

You can get this new recommendation along with other recommendations, by subscribing HERE

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Best Regards,

Ekansh Mittal

Research Analyst
Web: https://www.katalystwealth.com/

 

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Name: Ekansh Mittal     Email Id: [email protected]    Ph: +91 727 5050062

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