Buy Rossari Biotech; target of Rs 841: KR Choksey

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KR Choksey's research report on Rossari Biotech

Rossari Biotech missed our revenue estimate due to subdued growth In Textile Specialty Chemical segment and Animal Health Nutrition segment which was partially offset by growth in Home, Personal care and Performance chemicals (HPPC) segment. The stock is trading at PE multiples of 23.3x/18.9x based on FY25E/FY26E EPS estimates, respectively.

Outlook

We decrease the target price to INR 841/share (Previously: INR 925) and maintain the ‘BUY’ rating on the stock implying an FY26E P/E multiple of 22.0x. We believe the outlook for institutional cleaning business looks promising with management guidance. The upcoming Dahej project will be operational from end of FY25E and contribute to the topline from FY26E. However, expansion in the operating margins is likely to be challenging for the Company with decline in price realization.

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