Neutral Alkyl Amines Chemicals; target of Rs 1,640: ICICI Securities

Neutral

ICICI Securitie`s research report on Alkyl Amines Chemicals

Alkyl Amines Chemicals (AACL)’s 4QFY25 revenue increased 8% YoY to INR 3.9b. The growth was mainly volume-driven, though the company continues to face pricing pressure. Gross margin dipped 330bp YoY to 45.9%, while EBITDAM stood at 17.6%. PAT came in at INR 460m vs. our estimate of INR 522m. Exports contributed 25% of the total revenue in FY25. AACL reported 13% YoY volume growth in FY25 (15% in 4QFY25), but top-line growth was muted due to continued pricing pressure (-4% YoY in FY25). Pharma demand stayed stable, while agrochem demand remained volatile amid industry-wide capacity expansions. Average capacity utilization currently stands at 65-70% for the company.

Outlook

The company plans to invest INR 1.5b in FY26, including INR 1.0-1.2b at the Dahej site, with mechanical completion of the project expected by Dec’25/Jan’26. All projects are on track, with a focus on future volume growth and new product development. There are some other products, which are in the pipeline for which FID will be taken in due course of time. Given the lower-than-estimated 4QFY25, we cut our revenue/EBITDA/PAT estimates by 5%/11%/11% for FY26 and by 7%/13%/13% for FY27. We expect a revenue/EBITDA/EPS CAGR of 11%/13%/14% during FY25-27. We reiterate our Neutral rating on AACL with a TP of INR 1,640, based on 35x FY27E EPS.

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