Buy Sudarshan Chemical Industries: target of Rs 780: Sharekhan

Sharekhan is bullish on Sudarshan Chemical Industries has recommended buy rating on the stock with a target price of Rs 780 in its research report dated May 31, 2021.

Broker Research

June 10, 2021 / 11:58 IST

26 Aug, 2025 12:21

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Sharekhan's research report on Sudarshan Chemical Industries

Sudarshan Chemical Industries Limited (SCIL) reported solid Q4FY2021 results with stronger-than-expected revenue growth of 19.8% y-o-y and resilient margin at 15.1% (up 169 bps y-o-y). Sharp 19%/44% beat in operating profit/PAT at Rs. 87 crore/Rs. 53 crore, up 44%/58% y-o-y. Strong revenue growth was driven by 32.4% y-o-y revenue growth for the pigment segment to Rs. 533 crore, supported by volume growth of 27%/42% y-o-y for specialty/non-specialty products. Capex plan of Rs. 600 crore is nearing completion in FY2022 with incremental revenue potential of Rs. 1,000 crore-1,200 crore over the next 3-4 years. Rise in share of specialty chemical in revenue (versus 69% in FY2022) to improve margins. We expect SCIL to sustain high double-digit earnings growth over FY2022E-FY2023E with RoE of ~24%, led by its dominant position in the pigments market and capacity augmentation plan.

Outlook

Hence, we retain Buy on SCIL with a revised PT of Rs. 780.

For all recommendations report, click here