Buy Anupam Rasayan India, target price Rs 1,040: Jefferies

Jefferies Group has buy call on Anupam Rasayan India with a target price of Rs 1,040.

Anupam Rasayan India, incorporated in the year 2003, is a small cap company (having a market cap of Rs 8828.14 crore) operating in General sector.

Investment Rationale
Anupam Rasayan is well-positioned to benefit from 'China + 1' with its diversified chemistry expertise, wide customer base and presence across multiple verticals. Strong LT contract pipeline offers medium-term growth visibility. The brokerage forecasts Rev/ EBITDA/PAT CAGR of 33%/29%/31% over FY22-24E.


Valuation is favourable after a 16% correction. Jefferies initiates at Buy with Rs 1,040 PT at 38x P/E on accelerating earnings growth and upside potential from new contract wins.

Key Risks
The small size of its core R&D team creates key-man risk; other risks include the potential loss of any key customer, environmental risk of solid waste disposal, and a slowdown in the global agro chem cycle.

Financials
For the quarter ended 31-12-2021, the company has reported a Consolidated Total Income of Rs 271.12 crore, up 6.26% from last quarter Total Income of Rs 255.16 crore and up 43.03% from last year same quarter Total Income of Rs 189.56 crore. Company has reported net profit after tax of Rs 37.92 crore in latest quarter.

Promoter/FII Holdings
Promoters held 65.4 per cent stake in the company as of 31-Dec-2021, while FIIs owned 6.13 per cent, DIIs 3.35 per cent.