Fine Organic Industries Q3 Results Review: Dolat Capital Retains 'Buy', Lowers Target Price — Here's Why

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Dolat Capital Report

Fine Organic Industries Ltd.’s Q3 FY25 revenue of Rs 5.1 billion was in line with our estimates, however, Ebitda/PAT at Rs 990 million/ 827 million came below due to higher input costs and opex. Ebitda margin at 19.3% (-492 bps YoY/ -599 bps QoQ) was the lowest in the last 12 quarters.

Capex of Rs 7.5 billion provides much-needed growth visibility beyond FY27E. This expansion will largely be self-funded (~Rs 11 billion cash on books). Resumption of operations at the Badlapur facility in Q3 FY25 (disrupted since Q4 FY24, by fire at adjacent plant) to aid volumes. Management is also evaluating greenfield capex in USA.

Fine Organic is operating at optimal utilizations with limited volume growth headroom till new capex comes onstream; although Patalganga facility (E73; 10ktpa) is still operating at low utilizations (to be absorbed over next couple of years).

We trim our EPS estimates by 5-6% for FY25-27E to factor time-lag in pass through of higher input costs but reiterate ‘Buy’ rating with revised target price of Rs 5500 (earlier Rs 6100; 33x FY27E EPS).

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