Anand Rathi's research report on Sudarshan Chemical Industries
Driven by the initial consolidation of Heubach (for 28 days; y/y, q/q not comparable), which brought Rs5.25bn revenue and a 55.8% gross margin in Mar, Sudarshan Chemicals’ Q4 FY25 revenue was up 77% y/y to Rs13.5bn and adj. EBITDA, 24% y/y to Rs1.48bn. The Heubach integration is going well, and initial cost rationalization measures led to the Rs220m EBITDA (a 4.2% margin). The legacy pigment business is expected to grow 10–11% with steady margins (15-16%), while Heubach is guided to deliver €35m EBITDA in FY26 and €90m-100m (9-10% EBITDA margin) in 3-4 years. European plants will focus on specialties, and RIECO Inds. (the engineering subsidiary) is expected to turn around with better execution (7-8% EBITDA margin guidance).
Outlook
We resume coverage with a Buy rating and a sum-of-parts target price of Rs1,700 (implied 12x Sep’27 EV/EBITDA for the consolidated entity).
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