Hold Galaxy Surfactants: target of Rs 2520: ICICI Securities

ICICI Securities's research report on Galaxy Surfactants

Galaxy Surfactants’ (GSL) Q4FY24 EBITDA/kg stood at INR 16.9, down 27.2% YoY, was hurt from higher freight cost and lower volumes due to the Red Sea issue. GSL guides for volume growth of 6–8% in FY25 with an upside bias, as AMET and RoW may possibly contribute more, should the disturbances cease to escalate and/or dissipate. However, GSL has increased its EBITDA/kg guidance by INR 1 to INR 20.5–21.5/kg - we anticipated this and have penned it down in our detailed note (link). We were concerned about volumes moderating; however, GSL appears quite confident about sustaining it.

Outlook

We raise our FY25E/26E EPS by ~3% each, baking in higher other income. Our revised target price is now INR 2,520 (from INR 2,440), valuing GSL at a PE multiple of 22x FY26E EPS (unchanged). Maintain HOLD.