Accumulate Anupam Rasayan; target of Rs 1008: KR Choksey

KR Choksey recommended accumulate rating on Anupam Rasayan with a target price of Rs 1008 in its research report dated February 20, 2024.

Broker Research

February 21, 2024 / 12:01 IST

Accumulate

26 Aug, 2025 12:21

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KR Choksey's research report on Anupam Rasayan

For Q3FY24, Anupam Rasayan’s revenue declined 24.6% YoY (-24.6% QoQ) to INR 2,955 Mn. The revenue missed our estimate by 25.0% due to a drop in volume as customers were focused on liquidating the inventory. For 9MFY24, the revenue declined by 4.3% YoY to INR 10,741 Mn. EBITDA for the quarter declined by 28.9% YoY (-26.4% QoQ) to INR 791 Mn. EBITDA missed our estimate by 22.8% due to an increase in employee costs and an increase in other expenses coupled with a sharp decline in revenue. The corresponding EBITDA margin contracted 162 bps YoY and 65 bps QoQ to 26.8%. For 9MFY24, EBITDA declined by 10.2% YoY to INR 2,880 Mn and EBITDA margin contracted by 177 bps YoY to 26.8%. PAT declined by 57.1% YoY (-54.8% QoQ) to INR 184 Mn. PAT missed our estimate by 55.8% due to weak operating performance coupled with an increase in interest expense and depreciation. For 9MFY24, PAT declined by 21.3% YoY to INR 977 Mn and the PAT margin contracted by 197 bps YoY to 9.1%. We believe the short-term demand will be weak due to global de-stocking but it will gradually normalize in the upcoming quarters and recovery will begin by Q3FY25E. The growth drivers are the pharma segment, polymers, and the Japanese market business going forward.

Outlook

Currently, the stock is trading at a PE multiple of 46.1x and 31.7x based on FY25E/FY26E EPS, respectively. We introduce FY26E estimates; expect FY23-FY26E revenue CAGR of 13.7% and corresponding Adj. PAT CAGR of 18.8%. We apply a PE multiple of 35.0x to our FY26E EPS of INR 28.8 and arrive at a target price of INR 1,008 (INR 990 previously). Accordingly, we maintain our rating on the stock as ACCUMULATE, with a potential upside of 10.41%.

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