Hold Rossari Biotech, target price Rs 910: ICICI Securities
Rossari Biotech Ltd., incorporated in the year 2009, is a Small Cap company (having a market cap of Rs 4931.95 Crore) operating in Chemicals sector.
By ETMarkets.com | Updated:
iStock
ICICI Securities has hold call on Rossari Biotech with a target price of Rs 910. The current market price of Rossari Biotech is Rs 895.1. Time period given by analyst is one year when Rossari Biotech Ltd. price can reach defined target.
Rossari Biotech Ltd., incorporated in the year 2009, is a Small Cap company (having a market cap of Rs 4931.95 Crore) operating in Chemicals sector.
Rossari Biotech Ltd. key Products/Revenue Segments include Seeds, Other Operating Revenue for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 440.90 Crore, up 1.41 % from last quarter Total Income of Rs 434.77 Crore and up 99.41 % from last year same quarter Total Income of Rs 221.10 Crore. Company reported net profit after tax of Rs 22.75 Crore in latest quarter.
Investment Rationale
Rossari Biotech’s Q4FY22 standalone EBITDA dipped 20% YoY to Rs275mn, and standalone HPPC revenues fell 13% QoQ – which were unimpressive. However, the performance of acquired companies was steady, and this helped consolidated EBITDA growth of 49% YoY to Rs523mn. Company anticipates margins to stabilise in Q2FY23 aided by price increase, rationalisation of low-margin portfolios and softening RM costs. Rossari has guided for revenues at Rs20bn and EBITDA of Rs2.5bn for FY23, which implies 15% volume growth in the standalone business. Unitop and Tristar performance post acquisition has been steady, and Rossari has started launching new products taking advantage of acquired companies across HPPC, textiles and AHN segments. The integration of acquired companies moving on right direction though too early to conclude, but start is good. It cuts EPS estimates by 1-8% over FY23E-FY24 and the target price to Rs910 (from Rs1,047) as it reduces the P/E multiple to 30x (from 35x) FY24E EPS. Maintain HOLD.
Promoter/FII Holdings
Promoters held 68.56 per cent stake in the company as of 31-Mar-2022, while FIIs owned 9.03 per cent, DIIs 12.28 per cent.
Rossari Biotech Ltd., incorporated in the year 2009, is a Small Cap company (having a market cap of Rs 4931.95 Crore) operating in Chemicals sector.
Rossari Biotech Ltd. key Products/Revenue Segments include Seeds, Other Operating Revenue for the year ending 31-Mar-2021.
Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 440.90 Crore, up 1.41 % from last quarter Total Income of Rs 434.77 Crore and up 99.41 % from last year same quarter Total Income of Rs 221.10 Crore. Company reported net profit after tax of Rs 22.75 Crore in latest quarter.
Investment Rationale
Rossari Biotech’s Q4FY22 standalone EBITDA dipped 20% YoY to Rs275mn, and standalone HPPC revenues fell 13% QoQ – which were unimpressive. However, the performance of acquired companies was steady, and this helped consolidated EBITDA growth of 49% YoY to Rs523mn. Company anticipates margins to stabilise in Q2FY23 aided by price increase, rationalisation of low-margin portfolios and softening RM costs. Rossari has guided for revenues at Rs20bn and EBITDA of Rs2.5bn for FY23, which implies 15% volume growth in the standalone business. Unitop and Tristar performance post acquisition has been steady, and Rossari has started launching new products taking advantage of acquired companies across HPPC, textiles and AHN segments. The integration of acquired companies moving on right direction though too early to conclude, but start is good. It cuts EPS estimates by 1-8% over FY23E-FY24 and the target price to Rs910 (from Rs1,047) as it reduces the P/E multiple to 30x (from 35x) FY24E EPS. Maintain HOLD.
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Promoter/FII Holdings
Promoters held 68.56 per cent stake in the company as of 31-Mar-2022, while FIIs owned 9.03 per cent, DIIs 12.28 per cent.
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