Buy Ami Organics; target of Rs 1229: KR Choksey

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

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26 Aug, 2025 12:21

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During Q1FY23, Ami Organics Ltd reported Revenue of INR 1,310 Mn (+15.87% YoY / -8.71% QoQ). The export market and more specifically innovative businesses, were responsible for such growth. On operational front EBITDA in Q1FY23 stood at INR 229 Mn (+38.67% YoY) but dipped marginally on QoQ basis by 11.25%, OPM improved by 288 bps YoY and was flat QoQ at 17.46% in Q1FY23. Higher energy prices and reduced EBITDA from the speciality chemicals sector weighed on the EBITDA margins. Net Profit in Q1FY23 stood at INR 149 Mn showing an improvement of 8.76% YoY and saw a dip of 30% QoQ, mainly due to lower tax accountability in Q4FY22. NPM came at 11.37%, marginal impact of 74bps on YoY basis and 347bps on QoQ basis. EPS during the quarter came at INR 4.08 vs INR4 .36 in the same period last year.

At a CMP of INR 1,029 AOL is trading at a P/E multiple of 36.26x/27.22x its FY23E/24E earnings. We apply P/E multiple of 32.5x its FY24E earnings and thus continue to maintain our ‘BUY’ recommendation on the stock with the same target price of INR 1,229.