Accumulate Laxmi Organic Industries; target of Rs 249: KR Choksey

accumulate

KR Choksey's research report on Laxmi Organic Industries

Laxmi Organic’s revenue missed our estimate (-3.9%) due to decline in price realization in Essential segment. The EBITDA and PAT missed our estimate due to higher-than-expected cost of goods sold, and lower than expected other income. We expect the revenue to grow at 14.2% CAGR and Adj. PAT to grow at 30.0% CAGR over FY24-FY27E as we anticipate Fluoro-intermediates site to contribute incremental revenue, strategic focus of launching new products particularly in the fluoro-heavy derivatives, and sustained profitability from growth in specialty segment.

Outlook

We reduce our FY26E/FY27E EPS estimates by 10.9% and 13.0% to INR 7.3/ INR 9.6, due to continued weakness in Agrochemical sector, and pricing pressure persist on key products like ethyl acetate, We roll over our valuation multiple to FY27E and assign a PE multiple of 26.0x to arrive at a target price of INR 249 (previously: INR 297) and maintain “ACCUMULATE” rating.

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