Target: ₹2,331
CMP: ₹1,739.75
Continued volatility in the agrochemical sector and persistent competition from China (mainly for Balaji Specialty) did affect revenue booking last quarter. Revenue from operations as a result nosedived to ₹352.72 crore in Q4-FY25 as against ₹413.93 crore in Q4FY24, depicting a de growth of 14.8 per cent. Revenue drop was precipitated by a 7.6 per cent fall in volumes to 25,871 MT, though the reading improved somewhat from Q3 (24,107 MT).
However, commissioning of new projects like electronic grade DMC (May, 2025) and isopropyl amine (Q1FY26) will bolster offtake during the current fiscal.
The stock currently trades at 26.5x FY26e EPS of ₹63.01 and 21.5x FY27e EPS of ₹77.71. Continued focus on expanding the capacity of import substitution products and the launch of value-added products would help it report OPMs of well-nigh 20 per cent. Earnings are expected to strongly recover in the current fiscal (up 30 per cent), backed by higher volumes, though on a small base.
Pricing power may also improve as the Government of India takes a resolve to rest unfair competition by imposing anti-dumping duties. Weighing odds, we retain our ‘buy’ rating on the stock with a revised target price of ₹2,331 (previous target ₹2,653) based on 30x FY27e earnings over 9-12 months.
Published on June 26, 2025
