Buy Anupam Rasayan India; target of Rs 839: KR Choksey

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KR Choksey's research report on Anupam Rasayan India

On a consolidated basis, Anupam Rasayan India Ltd (ARIL) reported revenue of INR 3.827Mn in Q3FY23 grew by +43.8% YoY and - 0.9% QoQ. YoY growth is not comparable as the effect of Tanfac’s acquisition given during the quarter. Revenue contribution from Life science - speciality chemicals and Other speciality chemicals was 82% and 18% respectively compared to 90% and 10% in Q2FY23. EBITDA grew by 35.8% YoY at INR 1091 Mn however de-grew by 2.2% QoQ basis. EBITDA margin stood at 26.6% (-158bps yoy / -36bps QoQ). The margin dropped slightly on a sequential basis on account of lower absorption of fixed overheads as one unit was shutdown due to the fire incident during the quarter. Net profit reported at INR 544Mn (+43.5% YoY/ 13.9% QoQ). Net margin stood at 14.2% (-3bps YoY / 184bps QoQ). Improvement in net profit on a sequential basis was on account of higher other income compared to last quarter.

Outlook

We assign PE multiple of 20.0x to FY25E EPS of INR 37.9 to revise the target price at INR 839/share (Previous TP : INR 941) and maintaining our BUY recommendation on the stock with an upside of 45.7% at CMP.

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Anupam Rasayan India- 06 -02 - 2023 - kr