Fineotex Chemical Q3 Results Review: DRChoksey Maintains 'Buy' On The Stock, Sees 44% Upside — Here's Why

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Deven Choksey Report

Fineotex Chemical Ltd. posted muted sales and volume growth for Q3 FY25; primarily driven lower by a challenging demand environment in FMCG, textiles segment grew by 20% in volumes, exports also haven’t been able to keep up pace due to issues in Bangladesh.

On a nine-month basis revenues remained stable coming in at Rs 4,135 million (-0.6% YoY), Ebitda margin was also flat at 26% declining by 26 bps.

Fineotex Chemical has launched 30 new products in textile chemicals. Fineotex Chemical has also announced the launch of their water-based mosquito repellant “Aquastrike”, we believe water treatment and oil and gas verticals will drive growth going forward.

We introduce FY27 estimates, with a three-year revenue CAGR of 16% and Ebitda margins of 28%. Considering upcoming positive triggers for the company:

1. buoyancy in the textile markets

2. upcoming inorganic expansions,

3. new sustainable product launches,

we value the company at 20x FY27E EPS of Rs 16.6 to arrive at a target price of Rs 366 implying an upside of 43.9%.

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