Anupam Rasayan Q3 Review: Nirmal Bang Maintains 'Sell' On The Stock, But Hikes Target Price — Here's Why

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. 

Nirmal Bang Report

Anupam Rasayan India Ltd.’s Q3 FY25 standalone net revenue at Rs 2.12 billion missed our /street estimates by 10.2%/12.8%. Standalone PAT was 38.5% beat versus our estimate; but a tad miss against Standalone Bloomberg estimate.

Ebitda margin beat our estimate by 669 bps, and other expenses/ Staff cost came in 25.2%/5.8% below our estimate. Ebitda saw a beat of 11.8% versus our estimates and 9.1% beat against street estimates. Other income was negative Rs 29 million versus our estimate of Rs 14 million.

Consolidated Q3 FY25 YoY summary: Revenue up by 32.0% to Rs 3.9 billion, Ebitda up by 57.2% to Rs 1.24 billion and PAT grew by 53.2% to Rs 282 million. Consolidated 9M FY25 YoY summary: Revenue down by 12.6% to Rs 9.38 billion, Ebitda down by 10.4% to Rs 2.58 billion and PAT down by 50.1% to Rs 488 million.

Q3 FY25 Standalone PAT up by 24.8% YoY. Standalone Revenue was down by 1.2%; Gross margin was down by 345 bps YoY, as cost of goods sold was up 11.5% YoY. But Ebitda margin rose 435bps YoY, as Employee cost / other expenses were down 5.8%/21.4% YoY. Ebitda was up by 13.2% YoY to Rs 722 million.

We have raised FY25E estimates by 27.0% and cut FY26E/FY27E by 21.7%/12.2%, and rolled over to FY27E. We have raised the SOTPbased target price by 13.7% to Rs 552, using the unchanged PE of 22.5 times (Median PE of 81.7; and SD-1 of 54.5x, versus FY24-FY27E EPS CAGR – 34.8%; FY26E ROCE/ROE of 4.6%/4.4%. The stock is down 20.6% YoY, driven by concerns over headwinds in agrochem and high working capital.

We maintain our Sell rating on Anupam Rasayan based on the above factors and added concerns about execution versus expectations raised by the larger than life order book of Rs 107 billion, and the high working capital – cash collection cycle > 250 Days, versus FY18-21 avg. of 184 days. The stock is trading at rich PE of 30.3x on FY27E versus our small cap peers trading at 22 times, and EV/E of 18.8 times versus weak return ratios.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.