COVID-19-led disruption at the end of 4QFY20 led to a muted operating performance from the company. While near-term operational challenges are likely to dent 1HFY21, strong recovery is in sight for 2HFY21. Due to delay in consolidation of Creative Fragrances and Flavors (CFF) and COVID-19-led business slowdown, we cut our earnings estimates for FY21E/FY22E. Maintain Buy on account of attractive multiples.
OutlookWe expect a revenue/PAT CAGR of 14%/33% over FY20–22E, partly driven by CFF consolidation, a better RM pricing environment (leading to gross margin improvement), and improved demand dynamics across markets. We value the stock at 12x FY22E consol. earnings of INR7.4/share. Maintain Buy with TP of INR90/share.
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