Sharda Cropchem — Growth Momentum To Sustain Says Anand Rathi; Maintaining A 'Buy'

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Anand Rathi Report

We recently met Sharda Cropchem Ltd.’s Chairman and MD, Mr R V Bubna to gauge the business outlook. The key takeaways are-

1. Management is confident of achieving double-digit revenue growth (guidance raised 26% YoY post Q3 results versus 15-20% earlier) in FY25, particularly due to volumes and penetration into new markets.

2. Prices are largely stable QoQ; however, further price hikes may be difficult to pass on.

3. Major markets of Europe and NAFTA are likely to see double-digit volume growth.

4. The improving margin trend would likely continue in Q4 despite the higher base.

5. Working capital is under control and is likely to improve.

We broadly maintain our estimates. We expect revenue/Ebitda/PAT CAGRs of 14%/21%/23% over FY25-27. We, thus, retain our Buy rating, with an unchanged target price of Rs 730, 15 times FY27e earnings per share.

Risks: Escalation in geopolitical tensions between Russia and Ukraine, forex movements, no major improvement in realisations and delay in registrations.

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