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Buy Laxmi Organic Industries; target of Rs 535: Anand Rathi

Anand Rathi is bullish on Laxmi Organic Industries has recommended buy rating on the stock with a target price of Rs 535 in its research report dated February 12, 2022.

March 01, 2022 / 10:26 AM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

 
 
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Anand Rathi's research report on Laxmi Organic Industries


Laxmi Organic Industries Limited reported revenue growth from operation of 97.4% YoY at Rs.8,599 million during Q3-FY22 as against Rs.4,355 million in Q3-FY21. Both Acetyl Intermediated Business and Specialty Intermediate Business recorded robust growth. SI business points towards a consistent improvement of the financial matrices while the acetyl business brings in necessary cash flows to fuel the future growth and the investments. The company reported EBITDA of Rs.1,187 million in Q3-FY22 as against Rs.677 million in Q3-FY21, growth of 75.4% YoY. EBITDA Margins for Q3-FY22 stood at ~13.8%. The management expect the margin to sustain on back of cooling raw material prices. The profit after tax (PAT) for Q3-FY22 came in at Rs.816 million as against Rs.452 million during Q3-FY21 recording a growth of 80.7% YoY.


Outlook


The Company have de-risked business model with diversified customer base and portfolio across industry as well as presence across various geographies. We expect the growth momentum to continue in the medium term supported by ongoing strong Capex plans. We maintain our Buy rating on the stock with revised target price of Rs.535 per share.


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At 12:12 hrs Laxmi Organic Industries was quoting at Rs 430.25, up Rs 8.20, or 1.94 percent.

It has touched an intraday high of Rs 443.15 and an intraday low of Rs 420.40.

It was trading with volumes of 40,366 shares, compared to its thirty day average of 123,693 shares, a decrease of -67.37 percent.

In the previous trading session, the share closed down 4.99 percent or Rs 22.15 at Rs 422.05.

The share touched its 52-week high Rs 628.05 and 52-week low Rs 143.00 on 16 September, 2021 and 25 March, 2021, respectively.

Currently, it is trading 31.49 percent below its 52-week high and 200.87 percent above its 52-week low.

Market capitalisation stands at Rs 11,344.09 crore.

For all recommendations report, click here


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first published: Feb 15, 2022 12:55 pm
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