Buy Bodal Chemicals; target of Rs 150: ICICI Direct

ICICI Direct's research report on Bodal Chemicals

Bodal is the largest integrated manufacturer of dyestuff and dye-intermediates in India. It has undertaken multiple expansions in its core business and diversified areas with subsequent ramp expected to fuel next leg of growth in FY19E-20E As of 9MFY18, its core business of dyestuff and dye intermediates continued to witness satisfactory growth in volume terms However, partial resumption of Chinese capacity in FY18E led to softening of product realisations (down 10% YoY) thereby resulting in marginal decline in topline in FY18E (absolute basis)

Outlook

We value the company at | 150 i.e. 13.0x P/E on FY20E EPS of | 11.5/share. We have a BUY rating on the stock. We also derive comfort from an increase in core promoter stake, environmentally compliant chemical manufacturing facilities and strong customer profile like BASF in the dyestuff space. For all recommendations report, click here

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