Neutral Alkyl Amines Chemicals; target of Rs 2110: Motilal Oswal

Motilal Oswal's research report on Alkyl Amines Chemicals

AACL’s management remains cautiously optimistic, leveraging strong domestic leadership and expanded capacities (DEK, DMA) to drive scalable growth. While short-term challenges persist from low-cost imports, anti-dumping duties are expected to aid margin recovery and market share in 2HFY26. AACL increased its R&D spend to INR89m in FY25 (~0.6% of sales), focusing on new product development, process efficiency, and sustainability. It has developed three new products, one set for launch in FY26, with a growing emphasis on value-added innovation and environmental impact reduction.

Outlook

AACL expanded aliphatic amines capacity by ~30% in FY24 and is entering higher margin specialty products. We estimate a revenue/EPS CAGR of 11%/14% over FY25- 27. However, pricing pressure from imports and certain commoditized products pose risks; we remain Neutral on the stock with a TP of INR2,110.