Buy India Glycols; target of Rs 1056: Arihant Capital

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Arihant Capital's research report on India Glycols

India Glycols Ltd (IGL) reported strong numbers, Q1FY23 revenue stood at INR 808cr (+24.2% YoY/+25.8% QoQ); below our estimates of INR 816cr. Gross Profit stood at INR 277Cr (+40% YoY/-0.9% QoQ), Gross margins increased by 286 bps to 14.9% vs 12.0% in Q1FY22. The margin improvement mainly because of raw material cost decreased in terms of sales. The raw material cost in terms of sales stood at 65.7% vs 69.6% in Q1FY22. EBITDA stood at INR 63cr (+13.8% YoY/-21.5% QoQ); below our estimates of INR 67cr. EBITDA margin decreased by 71 bps to 7.7% vs 8.4% in Q1FY22. PAT stood at INR 28cr and PAT Margin stood at 3.4% vs -5.9% in Q1FY22.

Outlook

We have a “BUY’ rating at a TP of INR 1,056 per share; valued at PE multiple 10.9x and its FY24E EPS of INR 100.6; an upside of 32.2%.

For all recommendations report, click here

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India Glycols - 160822 - arih