Reduce Alkyl Amines; target of Rs 2294: HDFC Securities

HDFC Securities' research report on Alkyl Amines

We believe that the current valuation already factors in positives from potential volume growth, after doubling of the acetonitrile plant capacity and ~40% additional capacities of the aliphatic amines plant. EBITDA/APAT were 14/20% below our estimates, owing to higher-than-expected raw material cost, higher-than-anticipated depreciation, and lower-than-anticipated other income.

Outlook

We maintain REDUCE on Alkyl Amines (AACL) with a price target of INR 2,294 (WACC 12%, terminal growth 5%). The stock is currently trading at ~37x FY25E EPS.

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