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Nirmal Bang Report
Key Points
Rossari Biotech Ltd.'s Q1 FY24 Ebitda came ~8% below our estimates, mainly due to price decline across the portfolio and planned shutdown for two weeks.
Despite ~20% YoY overall volume growth during Q1 FY24, Ebitda came flat. The management has guided for low double digit revenue growth and ~14% Ebitda margin in FY24 (implied Ebitda growth of ~16% YoY).
Faster ramp up of Dahej without compromising the margin, remains the key. Maintain 'Accumulate'.
Outlook and Valuation:
Low double digit revenue growth and ~14% Ebitda margin guidance implies ~16% Ebitda growth for FY24. We believe Rossari's Ebitda growth for next two-three years should be in-line with its volume growth.
Faster ramp up of Dahej extended capacity and mix improvement could be the key triggers for the stock.
We are building in revenue/Ebitda/adjusted profit after tax compound annual growth rate of 16%/18%/26% over FY23-25E.
We value Rossari at 25 times price-to-earning based on June-25E earnings.
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