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Neutral Alkyl Amines; target of Rs 2350: Motilal Oswal

Motilal Oswal recommended Neutral rating on Alkyl Amines with a target price of Rs 2350 in its research report dated August 08, 2023.

August 12, 2023 / 12:18 IST
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    Motilal Oswal's research report on Alkyl Amines

    Alkyl Amines (AACL)’s 1QFY24 revenue declined 13% YoY, in line with expectation, primarily due to the current pricing conditions. Volumes grew ~15% YoY/10-12% QoQ. Gross margin contracted to 44.7% in 1QFY24. EBITDA was marginally ahead of our forecast at INR740m, driven by lowerthan-anticipated expenses. This resulted in an EBITDAM of 18.1% (-60bp QoQ) for the quarter. After a period of post-Covid slowdown caused by inventory buildup, the pharma industry’s outlook is now moderately optimistic. The company is experiencing a strong demand for its products from the agrochemicals sector. Management's guidance of a 10-15% volume growth remains unchanged.

    Outlook

    We have cut of EBITDA/ EPS estimate by 9%/ 10% for FY24 while keeping estimates for FY25 broadly unchanged. The stock is trading at 35x FY25E EPS and 24x FY25E EV/EBITDA. We reiterate our Neutral rating on the stock, and value it at 35x FY25E EPS to arrive at our TP of INR2,350.

    For all recommendations report, click here

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    Alkyl Amines - 09 -08 - 2023 - moti

    Broker Research
    first published: Aug 12, 2023 12:18 pm

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