Buy Fine Organic Industries; target of Rs 4600: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Fine Organic Industries

FINEORG’s growth prospects look encouraging given 1) healthy demand traction aided by improved client confidence and visible global consolidation benefits 2) capacity headroom enables capturing demand improvement, though constraints likely to appear in FY24 3) subsiding margin headwinds with reduced volatility and intensified pass through of higher costs to customers (incremental business only at spot pricing; negligible long term contracts) 4) net cash balance sheet and healthy cash flow generation of Rs 6.5 bn over FY22-24 to enable self-funded capex.

Outlook

We increase our EPS estimates by 7% / 12% / 4% for FY22/23/24E factoring in strong Q3 performance and improved earnings visibility given advancement in capacity absorption driving operating leverage benefits. Reiterate ‘BUY’ with revised TP of Rs4600 based on 28x FY24 EV/EBITDA.

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