Buy Balaji Amines; target of Rs 2,569: KR Choksey

KR Choksey's research report on Balaji Amines

Balaji Amines missed our revenue estimate significantly due to a steep fall in the price realization. The EBITDA missed our estimates primarily due to a lower-than-expected revenue and higher-than-expected operating expenses. • We believe the pharmaceutical market is showing positive momentum, which bodes well for future growth prospects. While the agrochemical market has experienced some softness in Q1FY25, we expect conditions to stabilize and see improvements in the coming quarters. We lower our FY25E/FY26E EPS by 5.4% and 2.8%, respectively due to a continued decline in price realization.

Outlook

Currently, the stock is trading at PE multiples of 24.6x and 18.6x, based on FY25E/FY26E EPS, respectively. We assign a P/E multiple of 21.5x (maintained) on FY26E EPS of INR 119.5 (previously: INR 122.9) to arrive at a target price of INR 2,569/share.