Buy Balaji Amines; target of Rs 560: HDFC Securities

HDFC Securities' research report on Balaji Amines

Both EBITDA and APAT were 40% above our estimates largely due to better sales mix. Higher sales volumes of high margin amines derivatives and specialty products has resulted in better gross margin of 48.2% (est. 44.4%). Besides, sales volumes were 4.7% more than expected.

Outlook

Our BUY recommendation on Balaji Amines with a TP of INR 560 owing to (1) Robust demand from pharma and agrochemical industry that comprise ~70% of its revenue mix, and (2) Faster than anticipated recovery in plant utilisation as demand bounces back post the Covid-19 pandemic.

Balaji Amines 24062020-hdfc