Buy Neogen Chemicals; target of Rs 1085: ICICI Direct

ICICI Direct is bullish on Neogen Chemicals recommended buy rating on the stock with a target price of Rs 1085 in its research report dated Jun 01, 2021.

June 10, 2021 / 12:22 PM IST
An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

ICICI Direct's research report on Neogen Chemicals


Neogen Chemicals reported topline growth of 13% YoY to Rs 92.7 crore against our expectation of Rs 87.1 crore. The growth was driven by higher growth in the inorganic chemical segment (up 31% YoY) largely on account of better volume growth. Revenue from organic chemical was up 7% YoY to Rs 72 crore. Growth from organic chemical segment remained subdued owing to capacity constraint. OPM for the quarter expanded 80 bps YoY to 20% leading to EBITDA growth of 17% YoY to Rs 18.5 crore vs. our estimate of Rs 17.2 crore. Gross margins expanded 386 bps YoY, 196 bps QoQ to 43.5%, largely on account of higher realisation and better product mix. Lower taxes (30% vs. 35% in Q4FY20) boosted bottomline growth, which was up 28% YoY to Rs 9.3 crore against our estimate of Rs 8.4 crore.


Outlook


We value the company at 38x PER of FY23E (~0.8x PEG). We arrive at a target price of Rs 1085 (earlier Rs 1040). We maintain our BUY rating on the stock.


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.

Broker Research
first published: Jun 2, 2021 01:39 pm

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark