Neutral Alkyl Amines; target of Rs 3025: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Alkyl Amines

AACL reported lower-than-estimated revenue. Gross margin contracted in 2QFY23 to 49% (down 190bp QoQ). Some raw material prices have started falling, which would help improve margins. EBITDA also came in below our estimate at INR813m with EBITDAM at 19.9% (down 460bp QoQ).  Capacity expansion of Ethyl Amines in Kurkumbh (100tpd capacity) is on track and is expected to be commissioned by May/Jun’23, with mechanical completion planned in Apr’23. Capex envisaged for the same is INR4b.

Outlook

AACL’s ROE is estimated to improve to 29% for FY24 from 25% in FY22. The stock is trading at 38x FY24E EPS and 26x FY24E EV/EBITDA. We reiterate our Neutral rating on the stock, and value it at 40x FY24E EPS to arrive at a target price of INR3025.

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Alkyl Amines - 10 -11-2022 - moti