Buy Sharda Cropchem; target of Rs 730: Anand Rathi

Anand Rathi's research report on Sharda Cropchem

We recently met Sharda Cropchem’s Chairman and MD, Mr R V Bubna to gauge the business outlook. The key takeaways are 1) Management is confident of achieving double-digit revenue growth (guidance raised 26% y/y post Q3 results vs. 15-20% earlier) in FY25, particularly due to volumes and penetration into new markets. 2) Prices are largely stable q/q; however, further price hikes may be difficult to pass on. 3) Major markets of Europe and NAFTA are likely to see double-digit volume growth. 4) The improving margin trend would likely continue in Q4 despite the higher base. 5) Working capital is under control and is likely to improve.

Outlook

We broadly maintain our estimates. We expect revenue/EBITDA/PAT CAGRs of 14%/21%/23% over FY25-27. We, thus, retain our Buy rating, with an unchanged TP of Rs730, 15x FY27e EPS.