Neutral Alkyl Amines Chemicals; target of Rs 2270: Motilal Oswal

Motilal Oswal's research report on Alkyl Amines Chemicals

Alkyl Amines Chemicals (AACL) reported a muted operating performance in 1QFY26 as EBITDA declined 3% YoY. Gross margin contracted 120bp YoY to 45.8%. Employee expenses increased by 30bp YoY to 7% YoY, while other expenses declined 60bp YoY to 20%.The company is expanding capacities, introducing new products, and upgrading manufacturing facilities. These initiatives are supported by in house R&D focused on enhancing quality and achieving cost efficiencies. In FY26, AACL aims to prioritize sustainable growth through increasing market share in existing products and launching new offerings.

Outlook

We largely maintain our FY26/FY27 estimates and value the stock at 45x FY27E EPS to arrive at a TP of INR2,270. Reiterate Neutral.