Hold Sudarshan Chemical, target price Rs 835: ICICI Securities
ICICI Securities retains a hold on Sudarshan Chemical Industries, lowering the target price to Rs 835 from Rs 980. Pigment revenue grew 15.3% YoY in Q3FY25, driven by exports. Total income for Q4 2024 was Rs 670.92 crore, with net profit at Rs 0.5...
By ETMarkets.com |
Agencies
ICICI Securities has maintained its hold call on Sudarshan Chemical Industries Ltd. with a lowered target price of Rs 835 (Rs 980 earlier). The current market price of Sudarshan Chemical Industries is Rs 878. Sudarshan Chemical, incorporated in 1951, is a Mid Cap company with a market cap of Rs 6887.70 crore, operating in the Chemicals sector.
Sudarshan Chemical's key products/revenue segments include Inorganic Pigments, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2024.
Investment Rationale
Sudarshan Chemical Industries' Q3FY25 pigment business revenue grew 15.3% YoY aided by exports business, while domestic business was weak due to destocking in coating segment. It expects to reach peak utilisation from new capex commissioned in the next 18 months, taking total pigment revenue to over Rs 30 billion. SCIL?s gross profit margin dip of 280bp QoQ was disappointing; however, it reiterated to achieve gross profit margin of over 45% for FY25, and sustain it, notwithstanding quarterly volatility. SCIL is nearing consummation of the Heubach acquisition and plans to turn around the business in the first year of operation. ICICI Securities cut EPS by 6-15% over FY25/26E, and target price to Rs 835 (from Rs 980) as they roll over valuation to FY27E but cut P/E multiple to 20x (from 25x). They are maintaining a HOLD call.
Financials
For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 670.92 crore, down -4.30 % from last quarter Total Income of Rs 701.06 crore and up 17.70 % from last year same quarter Total Income of Rs 570.02 crore. The company has reported net profit after tax of Rs .51 crore in the latest quarter.
The company's top management includes Mr.Pradeep R Rathi, Mr.Naresh T Raisinghani, Mr.Subramanian Padmanabhan, Mr.Dara N Damania, Mrs.Rathi F Forbes, Mr.Sanjay K Asher, Mr.Anuj N Rathi, Mr.Ashish Vij, Mr.Rajesh B Rathi, Mrs.Shubhalakshmi A Panse. Company has S R B C & Co. LLP as its auditors. As on 31-12-2024, the company has a total of 7 crore shares outstanding.
Promoter/FII Holdings
Promoters held 26.83 per cent stake in the company as of 31-Dec-2024, while FIIs owned 8.44 per cent, DIIs 18.35 per cent.
Sudarshan Chemical's key products/revenue segments include Inorganic Pigments, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2024.
Investment Rationale
Sudarshan Chemical Industries' Q3FY25 pigment business revenue grew 15.3% YoY aided by exports business, while domestic business was weak due to destocking in coating segment. It expects to reach peak utilisation from new capex commissioned in the next 18 months, taking total pigment revenue to over Rs 30 billion. SCIL?s gross profit margin dip of 280bp QoQ was disappointing; however, it reiterated to achieve gross profit margin of over 45% for FY25, and sustain it, notwithstanding quarterly volatility. SCIL is nearing consummation of the Heubach acquisition and plans to turn around the business in the first year of operation. ICICI Securities cut EPS by 6-15% over FY25/26E, and target price to Rs 835 (from Rs 980) as they roll over valuation to FY27E but cut P/E multiple to 20x (from 25x). They are maintaining a HOLD call.
Financials
For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 670.92 crore, down -4.30 % from last quarter Total Income of Rs 701.06 crore and up 17.70 % from last year same quarter Total Income of Rs 570.02 crore. The company has reported net profit after tax of Rs .51 crore in the latest quarter.
The company's top management includes Mr.Pradeep R Rathi, Mr.Naresh T Raisinghani, Mr.Subramanian Padmanabhan, Mr.Dara N Damania, Mrs.Rathi F Forbes, Mr.Sanjay K Asher, Mr.Anuj N Rathi, Mr.Ashish Vij, Mr.Rajesh B Rathi, Mrs.Shubhalakshmi A Panse. Company has S R B C & Co. LLP as its auditors. As on 31-12-2024, the company has a total of 7 crore shares outstanding.
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Promoter/FII Holdings
Promoters held 26.83 per cent stake in the company as of 31-Dec-2024, while FIIs owned 8.44 per cent, DIIs 18.35 per cent.
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