ICICI Securities's research report on Fine Organic Industries
Fine Organic Industries (FINEORG) reported revenue of INR 5.8b in 4QFY25. EBITDA stood at INR 1.1b (28% miss; down 18% YoY). EBITDAM contracted 660bp YoY to 18.8%, while gross margin dipped 640bp YoY to 37.2%. PAT was down 15% YoY to INR 885m (our est. INR 1.2b). In FY25, exports contributed 57%, and domestic sales formed 43% of revenue (56% and 44%, respectively, in 4QFY25). EBITDAM stood at 21.8% in FY25, hit by rising raw material and logistics costs due to global supply chain disruptions from 2QFY25. RM costs remained elevated but are expected to stabilize in the near future. The company maintained elevated inventory levels for both raw materials and finished goods to manage geopolitical risks and supply volatility, ensuring business continuity and readiness for demand spikes.
Outlook
We estimate a CAGR of 4%/-1%/-2% in revenue/EBITDA/PAT over FY25-27, with margin in the range of 19-20%. FINEORG is currently trading at 34x FY27E EPS and 26x FY27E EV/EBITDA. Valuations appear expensive for a company with no earnings growth during FY25-27. We reiterate our Sell rating on the stock with a TP of INR 3,660.
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