Buy Fineotex Chemical; target of Rs 366: KR Choksey

KR Choksey is bullish on Fineotex Chemical has recommended buy rating on the stock with a target price of Rs 366 in its research report dated February 18, 2025.

Broker Research

February 19, 2025 / 10:26 IST

Buy

KR Choksey's research report on Fineotex Chemical

Fineotex Chemical Ltd(FCL) posted muted sales and volume growth for Q3FY25; primarily driven lower by a challenging demand environment in FMCG, textiles segment grew by 20% in volumes, exports also haven’t been able to keep up pace due to issues in Bangladesh. On a 9month basis revenues remained stable coming in at INR 4,135 Mn (-0.6% YoY), EBITDA margin was also flat at 26% declining by 26 bps. FCL has launched 30 new products in textile chemicals. FCL has also announced the launch of their water-based mosquito repellant “Aquastrike”, we believe water treatment and Oil & Gas verticals will drive growth going forward. We introduce FY27 estimates, with a 3yr revenue CAGR of 16% and EBITDA margins of 28%.

Outlook

Considering upcoming positive triggers for the company: a) buoyancy in the textile markets b) upcoming inorganic expansions b) new sustainable product launches, we value the company at 20x FY27E EPS of INR 16.6 to arrive at a target price of INR 366 implying an upside of 43.9%.

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