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ICICI Securities Report
The brokerage ICICI Securitis has maintained its ‘Buy' rating on Sumitomo Chemicals India Ltd. while raising the target price to Rs 580 from Rs 515 earlier, implying a ~17% upside from the current market price.
Sumitomo Chemicals reported Ebitda/PAT of Rs 130 crore/ Rs 110 crore, up 12% each YoY (35%/47% QoQ), vs street's estimate of Rs 110 crore/Rs 97 crore, driven by a 200 basis points rise in gross margins.
Domestic business grew 4% YoY in both Q4 FY26 and FY26 despite adverse agro-climatic conditions, driven by new product launches.
The access to global parent–innovator (Sumitomo Chemical Company Ltd.) technology, aggressive capex, well-diversified portfolio, new product launches, regulatory clearance for bio -stimulant and Sumitomo Chemical Company plans to expand semiconductor chemical in India could support Sumitomo Chemicals' long-term growth.
The brokerage has cut its FY27E earnings to factor in a softer margin environment and upgrade FY28E by 2.8% baking in higher margin and revenue.
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