Ajcon Research Rossari Biotech Started in CY03 as “Rossari Lab tech”, a partnership firm, Rossari was converted to Company in CY09 by Mr. Edward Menezes and Mr. Sunil Chari.
Ajcon Research's IPO report on Rossari Biotech
Rossari Biotech is one of the leading specialty chemicals manufacturing company in India catering to various customers’ needs across FMCG, apparel, and poultry and animal feed industries (1,960 different products sold across different end industries). The Company is led by experienced promoters with 45+ years of experience in the specialty chemicals industry assisted by KMPs with 80+ years of experience cumulatively. The Company has Pan-India presence through 206 distributors and across 17 countries through 29 distributors as on January 31, 2020. Rossari Biotech manufactures majority of its products in-house from their manufacturing facility at Silvassa and currently setting up another manufacturing facility at Dahej in Gujarat with a proposed installed capacity of 132,500 MTPA. It has 2 R&D facilities– one within the Silvassa Manufacturing Facility and second in Mumbai.
Valuation and Outlook
At upper end of the price band of Rs 425, the issue is valued at a at a P/E of 34x at FY20 post IPO EPS which we believe is at a premium owing to its robust business model, big opportunity presented in COVID-19 crisis and strong return ratios. The recent fancy for speciality chemical companies instills confidence on this issue. We have a positive bias to the company owing to the following factors: a) diversified product portfolio addressing the needs of varied & long-standing customers across industries, b) largest textile specialty chemical manufacturer in India, c) extensive manufacturing and technical capabilities, d) surge in demand for home, personal care and performance chemicals segment given the spike in demand for sanitizers, disinfectants and handwashes which augurs well for the Company, e) strong R&D capabilities with focus on innovation and sustainability, f) established network of distributors in India and abroad, g) proven track record of robust financial performance (Revenue and PAT CAGR: 41.1 and 78.8 percent over the period FY17-FY19), h) ROE of 31.79 percent and ROCE of 24.79 percent for FY19. We recommend subscribe to issue for listing gains.
For all IPO stories, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.