Buy Shree Pushkar Chemicals; target of Rs 225: ICICI Direct

ICICI Direct is bullish on Shree Pushkar Chemicals has recommended buy rating on the stock with a target price of Rs 225 in its research report dated November 21, 2018.

November 23, 2018 / 02:39 PM IST
  • bselive
  • nselive
Todays L/H

ICICI Direct's research report on Shree Pushkar Chemicals

Shree Pushkar Chemicals (SPCL) reported a steady Q2FY19 performance primarily driven by volume growth in the dyestuff business. On a consolidated basis, net sales in Q2FY19 were at Rs 115.4 crore, up 20% YoY EBITDA in Q2FY19 came in at Rs 19.4 crore (up 11.5% YoY), with corresponding EBITDA margins at 16.8% Margins came in slightly muted against our expectation amid an increase in prices of dye intermediates in the recent past PAT in Q2FY19 was at Rs 12.3 crore, up 18.2% YoY, driven by higher sales & supported by lower effective tax rate, which came in at 27.0%.


SPCL has a healthy balance sheet with controlled leverage. FY18 debt: equity was at 0.3x with absolute debt at Rs 64 crore. By virtue of it realising ~2x asset turnover and 15%+ margins; it realises healthy ~20% return ratios thereby warranting inclusion in the midcap portfolio. Going forward, with expanded dyestuff capacity & subsumed Kisan Phosphate, on a consolidated basis, we expect sales, PAT to grow at a CAGR of 12.7%, 16.3%, respectively. We value SPCL at Rs 225 i.e. 14x P/E on FY20E EPS of Rs 16.1. We maintain our BUY rating on the stock. We also derive comfort from the preferential allotment to the promoter group @ Rs 211.6/share amounting to ~Rs 11 crore in May 2018.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Nov 23, 2018 02:39 pm

stay updated

Get Daily News on your Browser