Buy Sharda Cropchem; target of Rs 1250: Anand Rathi

Anand Rathi's research report on Sharda Cropchem

Healthy, 13% y/y, volume growth and market-share gains in its key regions drove Sharda Cropchem’s Q1 results. Growth improved on the back of better demand scenario particularly in Europe and a near complete destocking across major regions. Ahead, we believe prices have bottomed out & volumes would improve as the company expands its reach, penetrating current markets and entering new ones. Further, concerns about the USChina trade war are now subsiding, providing stability to organic growth. That said, we expect 14/25/30% revenue/EBITDA/PAT CAGRs over FY25-28. We introduce FY28e and roll forward our valuation to H1 FY28.

Outlook

We retain a Buy recommendation, with a higher TP of Rs1,250 (earlier Rs770), on 18x H1 FY28e EPS.

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