KR Choksey's research report on Apcotex Industries
Apcotex reported a revenue growth of 25% YoY to INR 150cr as against our estimates of INR 154cr. The growth was largely led by both NBR and latex segments. OPM expanded by 478bps YoY to 11.9% primarily due to operating leverage at Valia plant resulting into EBITDA to up by 108.7% YoY to INR 17.9cr against our estimates of INR 24cr. The variance is primarily on account of higher RMAT cost (+18% YoY) due to increase in butadiene prices. PAT was increased by 114.9% YoY to INR 11.3cr against our estimates of INR 12.7cr, largely supported by strong operational performance and higher other income.
Outlook
APCO is trading at 21x FY19E and 16.8x FY20E of our earning estimates. We have maintained our estimates and valued the company at 20x on FY20e and arrived a target price of INR 673, potential upside of 19% from CMP of INR 565.
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