On strong fundamentals that is expected to boost Anupam Rasayan share price in long term, Jefferies says, "Reducing working capital intensity via inventory reduction (shifting more clients to 6-monthly pricing resets) and higher asset turns from Fluorination (2.5x projected vis-à-vis ~ 1x on current portfolio) should improve ROCE over FY24-25E. ARIL has surplus land and utilities that will help the company achieve higher asset turns on its fluorination capex."
"Standalone revenues rose 25% y/y and were 3% below JEFe. Gross margin (-40bps q/q) and EBITDA margin (-110bps q/q) fared in line with JEFe and indicate margin resilience on the back of pass-through of raw material costs. PAT was, however, 16% below JEFe due to elevated interest expenses on working capital debt and FX loss on foreign currency debt of ₹4.4bn," the brokerage added.
On its suggestion to positional investors in regard to Anupam Rasayan shares, Jefferies said, "Management expects FY23 revenue growth at the upper end of guidance range of 25-30%, with stable margins due to firm offtake agreements. We have raised FY23E EBITDA 5% on stable margins and forecast EBITDA/PAT CAGR of 24/27% over FY22-25E. Its small revenue base provides meaningful upside optionality from potential fluorination contract wins. Maintain Buy, with a revised Rs1,030 PT (vs. Rs1,000 previously) at an unchanged 38x P/E as we roll over."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
