Accumulate Anupam Rasayan India; target of Rs 810: KR Choksey

KR Choksey's research report on Anupam Rasayan India

Anupam Rasayan’s revenue missed our estimate due to weak demand in Agrochemical segment. EBITDA missed our estimate due to higher operating expenses. We decrease our FY25E and FY26E EPS by 21.3% and 18.1%, respectively, due to weak quarterly performance and continued short-term challenges experienced in Agrochemical industry. Currently, the stock is trading at PE multiples of 58.6x/35.9x based on FY25E/FY26E EPS, respectively. We assign a PE multiple of INR 36x (previously: 30.0x) on FY26E EPS of INR 22.5 (previously: INR 27.5) to arrive at a target price of INR 810 (previously: INR 824) with revenue growth anticipate to resume in H2FY25E driven by higher contributions from the Polymer and Pharma segments, as well as the ramp-up of Letter of Intent (LOIs) and contracts.

Outlook

We assign a PE multiple of INR 36.0x (previously: 30.0x) on FY26E EPS of INR 22.5 (previously: INR 27.5) to arrive at a target price of INR 810 (previously: INR 824) with revenue growth anticipate to resume in H2FY25E driven by higher contributions from the Polymer and Pharma segments, as well as the ramp-up of LOIs and contracts. Given a 5.2% upside, we maintain our rating of “ACCUMULATE” on the stock.

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