Neutral on Alkyl Amines Chemicals, target price Rs 3825: Motilal Oswal

Motilal Oswal has neutral call on Alkyl Amines Chemicals with a target price of Rs 3825. The current market price of Alkyl Amines Chemicals Ltd. is Rs 3615.15. Time period given by analyst is one year when Alkyl Amines Chemicals Ltd. price can reach defined target.

Alkyl Amines Chemicals Ltd., incorporated in the year 1979, is a Small Cap company (having a market cap of Rs 18488.30 Crore) operating in Chemicals sector.

Financials
For the quarter ended 31-03-2020, the company reported a Consolidated Total Income of Rs 237.38 Crore, down -8.37 % from last quarter Total Income of Rs 259.08 Crore and down -.19 % from last year same quarter Total Income of Rs 237.84 Crore. Company reported net profit after tax of Rs 49.21 Crore in latest quarter.


Investment Rationale
The stock is trading at 42x FY23E EPS of INR85 and 30x FY23E EV/EBITDA. The brokerage values the company at 45x FY23E EPS to arrive at TP of INR3,825. It initiates coverage with a Neutral rating due to a limited upside. Although, capacity expansions would facilitate the current high valuations as the company is expected to generate ROEs of 35–37%, the best among peers.