Ami Organics Q3 Results Review - Pricing Pressures Impact Growth: IDBI Capital

The company now produces two electrolyte additives, holding long-termglobal contracts.

<div class="paragraphs"><p>Representational Image (Source: Ami Organics)</p></div>
Representational Image (Source: Ami Organics)

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

IDBI Capital Report

Ami Organics Ltd.'s posted a subdued financial performance in Q3 FY24. While revenue grew by 9% YoY, adjusted profit after tax declined by 25% YoY. Gross margins stood at 43% as against a usual run rate of 46-48%. Ebitda margins stood at 16% as against a usual run-rate of 20-22%.

Lower gross margins were on account of higher price erosion and higher sale of low margin products namely specialty chemicals and domestic pharma intermediate sales.

We factor in the revenue guidance cut by the management owing to deferment in product launch of a key product coupled with China led pricing pressures.

We lower our FY24/FY25/FY26 PAT by 23%/27%/13% to factor in lower growth of the pharma and specialty chemical business.

We downgrade our rating from 'Buy' to Hold with target price of Rs 1,134 (Previous target price: Rs 1,300) assigning a target multiple of 35 times on FY26 earning per share.

Click on the attachment to read the full report:

IDBI Capital Ami Organics Q3 FY24 Resuls Review.pdf
Hindalco Shares Tumble Over 14% After U.S. Unit Raises Project Cost Guidance


This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.