Buy Rossari Biotech; target of Rs 982: KR Choksey

KR Choksey is bullish on Rossari Biotech has recommended buy rating on the stock with a target price of Rs 982 in its research report dated August 01, 2023.

Broker Research

August 02, 2023 / 15:18 IST

Buy

26 Aug, 2025 12:21

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KR Choksey's research report on Rossari Biotech

Rossari Biotech’s consolidated revenue stood at INR 4,106 Mn for Q1FY24 which grew by 1% on a QoQ basis (-5.5% YoY) due to muted performance from subsidiaries and stable exports. On a standalone basis, revenue stood at INR 2,583 Mn (-2% QoQ/+10.5% YoY). The company reported steady numbers during the quarter despite weak macroeconomic environment. The consolidated EBITDA for the quarter stood flat at INR 577 Mn on a YoY basis and grew 5.8% on a QoQ basis. The EBITDA margin during the quarter stood at 14.1% as compared to 13.3% in Q1FY23 translating to an increase of 78bps YoY and 65 bps QOQ from 13.4% in Q4FY23. Improvement in margin is mainly attributable to efficient management of raw material price volatility and focus on high margin products. For Q1FY24, Rossari reported a flat net profit of INR 292 Mn (2.0% YoY, 1.2% QoQ). The quarter’s PAT margins also remained at 7.1% (+53 bps YoY, -1 bp QoQ).

Outlook

Currently, the stock is trading at a PE multiples of 33.9x / 21.4x based on our FY24E / FY25E EPS estimates, respectively. We are positive on R&D strength of Rossari Biotech Ltd which has a major focus on developing new products for its long term business growth. We will continue to observe the margin performance as a key monitorable in the upcoming quarters. We estimate PAT to grow at 42.1% CAGR over FY23-25E with EBITDA margin range of 14% - 17%. We retain our target price at INR 982/share ( P/E multiple 25x to FY25E EPS) and retain our BUY recommendation on the stock (upside: 16.8%)

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