Buy Vishnu Chemicals; target of Rs 1513: Arihant Capital

Arihant Capital is bullish on Vishnu Chemicals has recommended buy rating on the stock with a target price of Rs 1513 in its research report dated October 21, 2021.

Broker Research

October 25, 2021 / 12:23 IST

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

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Arihant Capital's research report on Vishnu Chemicals

Vishnu Chemicals Limited is in the business of manufacturing, marketing and export of chromium chemicals and other specialty chemicals. The Company's principal product/services include Basic Chromium Sulphate, Sodium Dichromate and Barium Carbonate. Its geographical segments include Domestic and International markets. Its manufacturing plants are located in Telangana, Andhra Pradesh and Chhattisgarh. It has an annual capacity of producing 70,000 MT of Sodium Dichromate and the facilities have high degree of flexibility to switch between products to meet client demand accordingly. We initiate coverage on the stock given its leadership position in its operating segment and improvement in financials post its completion of the capex program.

Outlook

The company is expected to deliver robust financial performance post completion of its capex projects in Q4FY22. For FY22, revenue is expected to reach ~ INR 860 Cr with operating margins of 14.5% and PAT of ~ INR 57 Cr. Similarly, FY23 will see the full effect of the company’s future plans and revenue projected at ~INR 995 Cr with increase in operating margins to 18.8% and PAT of ~INR 101 Cr. Factoring in its sinewy growth, we value the company at a P/E multiple of 14x its FY24E EPS of INR 108.1 and arrive at a Target Price of INR 1,513 per share. Accordingly, we recommend a BUY rating on the shares of Vishnu Chemicals Ltd.

For all recommendations report, click here