Buy I G Petrochemicals; target of Rs 931: KR Choksey

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26 Aug, 2025 12:21

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KR Choksey's research report on I G Petrochemicals

I G Petrochemicals Limited (IGPL) is the largest producer of Phthalic Anhydride (PAN) in India and possesses a domestic market share of 49% with an installed capacity of 1,75,110 Metric Tonnes Per Annum (MTPA). The company has a total of three plants situated at a single location in Taloja, currently operating at maximum utilizations (95%) catering to domestic (80%) and international markets (20%). PAN is utilized as an intermediate in production of Plasticizers, Alkyd Resins, Unsaturated Polyester Resins (UPR) and Copper Pthalocyanine (CPC).

Outlook

The company is currently trading at two year forward P/E of 9.9x as against an average of 9.4x over FY11-FY17. Going forward, we believe that IGPL should fetch premium valuations on account of 1) favorable macro scenario; 2) higher revenue visibility led by capacity addition plans and forward integration; 3) stability in spread between OX and PAN prices; 4) strengthening of balance sheet and 5.) Robust return ratios. We have valued the company at a P/E multiple of 12x on FY20E EPS of INR 78 to arrive at a target price of 931/share resulting into an upside of 40.4% from CMP of INR 663. We have assigned a “BUY” rating on the stock.

For all recommendations report, click here

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