Motilal Oswal's research report on Galaxy Surfactants
Galaxy Surfactants (GALSURF) reported an EBITDA/kg of INR20.8 (our estimate at INR19.3; down 23% YoY). The ongoing inventory destocking in North America further impacted the performance of the subsidiary. The company achieved a total volume growth of ~7% YoY to 59.4tmt (57.9tmt in 4QFY23), with strong double-digit growth observed in the Performance segment, accompanied by strong domestic volume expansion. Management highlighted that India demand remains resilient, with positive demand momentum in premium categories that is expected to drive growth in the upcoming quarters. There was recovery in rural demand as well with demand for mass and masstige categories remaining buoyant. Management is confident that consumption would make a comeback in the developed markets in FY24. This stems from the easing inflation pressures and the EU’s adjustment to the evolving paradigm, both contributing to the projected recovery.
Outlook
The stock is currently trading at 23.6x FY25E EPS and 14.7x FY25E EV/EBITDA. We value the company at 30x FY25E EPS of INR109.5, to arrive at our TP of INR3,285. We reiterate our BUY rating on the stock with a potential upside of 27%.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
