Add Galaxy Surfactants, target price Rs 2555: ICICI Securities

ICICI Securities has add call on Galaxy Surfactants with a target price of Rs 2555. The current market price of Galaxy Surfactants is Rs 2414.1.

Galaxy Surfactants, incorporated in the year 1986, is a Mid Cap company (having a market cap of Rs 8509.32 Crore) operating in Chemicals sector.

Galaxy Surfactants key Products/Revenue Segments include Other Operating Revenue and Scrap for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 1084.00 Crore, down -12.06 % from last quarter Total Income of Rs 1232.71 Crore and up 16.45 % from last year same quarter Total Income of Rs 930.85 Crore. Company has reported net profit after tax of Rs 106.21 Crore in latest quarter.

The company’s top management includes Mr.M G Parameswaran, Mr.U Shekhar, Mr.K Natarajan, Mr.Vaijanath Kulkarni, Mr.G Ramakrishnan, Mr.Shashikant Shanbhag, Ms.Nandita Gurjar, Mr.Subodh Nadkarni. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-12-2022, the company has a total of 4 Crore shares outstanding.

Investment Rationale
Despite high EBITDA/kg of Rs 25 for 9MFY23, company believes it will continue to deliver 6-8% volume growth. EBITDA growth is likely to be higher than volumes and PAT will grow the fastest. RoCE stands at 22%. Company believes it will be able to hold to EBITDA growth even as margins currently are at higher levels. This will come from efficient sourcing of key raw-materials, improving product mix and in-built strength of business model.

Promoter/FII Holdings
Promoters held 70.93 per cent stake in the company as of 31-Dec-2022, while FIIs owned 2.78 per cent, DIIs 12.72 per cent.