Buy Ami Organics; target of Rs 2613: KR Choksey

KR Choksey's research report on Ami Organics

Ami Organics’ revenue beat our estimates significantly due to strong growth in Advanced Intermediates segment. EBITDA and Adj. PAT was well above our estimates due to better-than-expected gross profit and operating leverage. We increase our FY26E and FY27E estimates by 9.8% and 12.9% to INR 50.9 and INR 67.0 respectively driven by a strong CDMO pipeline with multiple molecules advancing through clinical trials, steady progress in the electrolyte additive business with supply contracts secured, and upward revision in the revenue growth guidance, ensuring long-term growth visibility.

Outlook

We roll over our valuation multiple to FY27E and assign a PE multiple of 39.0x to arrive at a target price of INR 2,613 (previously: INR 1,994) reflecting sustained high demand in the chronic therapeutic portfolio and improving profitability margins as the CDMO segment expands. Therefore, we upgrade the rating on the stock to “BUY” from “ACCUMULATE”.