Hold Sharda Cropchem; target of Rs 254: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Sharda Cropchem

Sharda Cropchem reported better than expected results driven by 23% growth in Europe. Pre-buying was one of the key factors for good traction in business. Gross margin expansion of 512 bps was driven by geographical mix and demand for high margin products. Earnings have hit trough in FY20 in our view and we expect operating environment to improve going forward with both Europe and NAFTA being the growth drivers. Gross margin pressure is expected to ease with improvement in availability and reduction in price of raw materials.

Outlook

We expect Sharda to clock topline/EBITDA/PAT CAGR of 9%/12%/4% between FY20-22E. We have increased our topline/bottomline estimates by 11%/15% for FY21E and 13%/17% for FY22E and upgraded our target price to Rs 254 (Previous 218) based on 13x FY22E earnings.

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