Prabhudas Lilladher's research report on Sharda Cropchem
Sharda Cropchem reported better than expected results driven by strong demand from Europe & NAFTA region and new product introduction. Prebuying of raw material in the wake of cost inflation and healthier sales mix aided 985bps improvement in gross margins. SHCR turned around operations in FY21, leveraging on the demand from Europe & NAFTA. Growth momentum is expected to continue driven by expanding distribution reach, new launches and strong demand for generic molecules. Also cushion on gross margins is expected to continue with better availability and healthy demand.
We have increased our Topline/APAT estimates by 3%/3% for FY21, 3%/7% for FY22 and 3%/7% for FY23. Maintain BUY with revised TP of Rs383 (Previous 358) based on 13x Sep’22 earnings.