Buy Galaxy Surfactants, target price Rs 3,466: HDFC Securities

HDFC Securities has a buy call on Galaxy Surfactants with a target price of Rs 3,466. The current market price of Galaxy Surfactants is Rs 2,749.55. Galaxy Surfactants, incorporated in 1986, is a Mid Cap company with a market cap of Rs 9685.53 crore, operating in the Chemicals sector.

Galaxy Surfactants' key products/revenue segments include Specialty Chemicals, Other Operating Revenue and Scrap for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 1071.68 crore, up 9.42% from last quarter Total Income of Rs 979.46 crore and up 8.71% from last year same quarter Total Income of Rs 985.80 crore. The company has reported net profit after tax of Rs 84.71 crore in the latest quarter.

Investment Rationale
HDFC Securities' BUY recommendation on Galaxy Surfactants with a price target of Rs 3,466 is premised on (1) the global home and personal care leaders having raised the volume growth outlook for 2024 after strong volumes in YTD; (2) demand for premium specialty care products expected to rebound as demand in Europe and North America rebounds with the easing of inflation and the end of inventory destocking; and (3) demand in RoW markets continuing. Q2 EBITDA/APAT were 30/38% above our estimates owing to higher-than-expected revenue and offset by higher-than-expected raw material cost. The brokerage has tweaked the EPS estimates by 5.9/5.7% for FY25/FY26E.

Promoter/FII Holdings
Promoters held 70.91 per cent stake in the company as of 30-Sep-2024, while FIIs owned 4.08 per cent, DIIs 12.99 per cent.