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Centrum Broking Report
Anupam Rasayan India Ltd.'s better than estimated consolidated Q4 performance was supported by Tanfac with revenue/Ebitda beating our estimates by 8%/ 2% despite QoQ decline in standalone margins.
The company reported Q4 consolidated revenues/ Ebitda/profit after tax of Rs 4,800 million/ Rs 1173 million/ Rs 567 million. Gross margins and in turn Ebitda margins remained under pressure in standalone business leading to 11.6% YoY decline in Ebitda at Rs 925 million (Rs 1,046 million).
Over the past few months, Anupam Rasayan has signed three letter of intents of ~Rs 29 billion with multi national companies for fluorination products. We believe ramp up in fluorination space will remain a key growth driver for the company.
Importantly, Anupam Rasayan improved its working capital from 291days to 250 days YoY with further reduction expected in FY24E. Based on new LOIs, we have upped our FY24E/ FY25E earnings by 7.3%/ 3.6%.
We have rolled over our valuations to FY25E and upgraded our P/E multiples. However, since our last update, the stock price has doubled.
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