KR Choksey's research report on Tatva Chintan Pharma Chem
Revenue stood at INR 1,047Mn down by 15.3% QoQ (+30.6% YoY) on account of contraction in demand witnessed for its product segment ‘Structured Directing Agents’ (SDAs) that contributed 51% of revenue as against 62% in the previous quarter. EBITDA stood at INR 238Mn, degrew by -2.9% YoY (-33.7% QoQ) due to increased cost of sales by 40% YoY accompanied by rise in other expenses by 68% YoY. As a result, EBITDA margin declined to 22.75% vs. 30.6% in Q3FY21 (-786 bps YoY). PAT grew by 9.2% YoY at INR 228Mn (-29.6% QoQ). PAT margin reported at 21.8% declined by 427 bps YoY / 443 bps QoQ. EPS stood at INR 10.3 as against INR 10.39 / INR 14.62 in Q3FY21 / Q2FY22, respectively. TCPCL’s 9MFY22 performance posted strong growth in revenue, EBITDA and PAT at 75% / 107% / 152% on YoY basis, respectively. EBITDA and PAT margins stood at 25.5% / 23.4% as compared to 21.5% / 16.2% in 9MFY21, respectively.
We assign PE multiple of 40.0x to FY24E EPS to arrive at our revised target price of INR 2,902 per share (old Target: INR 2,620) and reiterate our ACCUMULATE view on the stock.
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