Hem Securities has come out with its report on Rossari Biotech. The research firm has recommended to "Subscribe'' the IPO in its research report as on July 10, 2020
Hem Securities' IPO report on Rossari Biotech
Company is one of the leading specialty chemicals manufacturing companies in India based on sales for Fiscal 2019 providing customized solutions to specific industrial and production requirements of company’s customers primarily in the FMCG, apparel, poultry and animal feed industries through company’s diversified product portfolio comprising home, personal care and performance chemicals; textile specialty chemicals; and animal health and nutrition products. Company’s customer base currently comprises a host of multinational, regional and local FMCG companies including, inter alia, RSPL Limited (Ghadi detergent), IFB Industries Limited, Hindustan Unilever Limited, BSH Household Appliances Manufacturing Private Limited, CICO Technologies Limited, Rentokil Initial Hygiene India Private Limited and Millennium Papers Private Limited; apparel and textile companies including, inter alia, Arvind Limited, Ashnoor Textile Mills Limited, Bhaskar Industries Private Limited, European Textile Chemical Corporation and Shahi Exports Private Limited; and poultry feed, animal feed or food-service companies including inter alia, Hitech Hatch Fresh Private Limited, Gokul Poultry Industries, Sarvottam Poultry Feed Supply Centre Private Limited and Sneha Farms Private Limited. Company is bringing the issue at p/e multiple of more than 30x at higher end of price band of Rs 423-425/share on post issue FY20 eps basis. .
Valuation and Outlook
Company has shown strong growth in its financials in last few years. The company is expected to see strong growth in coming years also after full commencement of dahej facility . Even on sectoral front, robust growth in user industries in India will support growth while emerging opportunities in exports led by clamp down in China and outsourcing opportunity from Western countries are expected to spur growth in exports and import substitution which will benefit company. Therefore, looking after all, we recommend “Subscribe” the issue both for short & long term horizon.
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