Laxmi Organic Industries Q2 Results Review - Performance Impacted By Plant Shutdown: Prabhudas Lilladher
Weak quarter with Ebitda at Rs 286 million due to maintenance shutdown at both units at Mahad, impacting SI and AI business.
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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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