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Prabhudas Lilladher Report
Laxmi Organic Indsutries Ltd.'s specialty intermediates revenue visibility remains high given long term contracts from global majors while fluorochemicals business faces time and cost overruns, and is likely to scale up gradually once commissioned by Q4 FY23.
Acetyl intermediates and specialty intermediates will remain Laxmi Organic's core businesses in the medium term, while fluorochemicals will be a long term earnings driver.
We believe, Ebitda contribution from higher value segments (specialty intermediates plus fluorochemicals) will increase to ~70% by FY25E from ~55% in FY22 as specialty intermediates Ebitda grows at ~22% compound annual growth rate and fluorochemicals earnings commence in Q4 FY23.
While we like Laxmi Organic's stronghold in both acetyl intermediates and specialty intermediates business, we believe that fluorochemicals scale up will be gradual, while most positives are factored in its valuations.
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