Buy Rossari Biotech; target of Rs 931: KR Choksey

KR Choksey's research report on Rossari Biotech

Rossari Biotech’s revenue beat our estimate (+2.8%) due to strong volume growth in HPPC (Home, Personal Care, and Performance Chemicals) business and in the TSC (Textile Specialty Chemicals) division. We anticipate this growth momentum in revenue will continue due to strong demand in the end customer segments. Additionally, the upcoming Dahej project, expected to become operational, by the end of FY25E is likely to contribute to the top line from FY26E onwards. Currently, the stock is trading at PE multiples of 27.9x/22.8x, based on FY25E/FY26E EPS, respectively.

Outlook

We assign a P/E multiple of 26.4x (previously: 22.0x) on FY26E EPS of INR 35.3 (previously: 38.2) to arrive at a target price of INR 931/share (previously: INR 841/share). Given the 15.6% upside potential, we maintain our BUY rating on the stock.