Buy Fineotex Chemicals; target of Rs 476 KR Choksey

KR Choksey is bullish on Fineotex Chemicals has recommended buy rating on the stock with a target price of Rs 476 in its research report dated November 15, 2024.

Broker Research

November 15, 2024 / 14:31 IST

Buy

KR Choksey's research report on Fineotex Chemicals

FCL reported a revenue of INR 1,457 Mn, a growth of 2% QoQ, flat YoY. Gross Margins remained flat declining by 36bps, coming in at 38.22%.EBITDA margins (excl. OI) were maintained on a QoQ basis, coming in at 25%, with a 133bps decline on a YoY basis, margins were in line with our expectations. Other Income came in at INR 69Mn. PAT for the quarter was at INR 321 Mn (+9% YoY/ 2% QoQ), helped by Other Income, while margins were maintained • The stock is currently valued at 23x FY25E and 16x FY26E EPS. Anticipating challenges in volume growth, we have revised our EPS estimates for FY25E and FY26E downward by 10% each.

Outlook

However, given strong growth prospects and key upcoming catalysts, we retain our target forward P/E multiple of 30x based on an FY26E EPS of INR 16, resulting in a revised target price of INR 476/share (down from INR 529/share). We thus maintain our “BUY” rating, offering a potential upside of 36.8%.

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