These 2 specialty chemical stocks get ‘Buy’ from Anand Rathi post Q3 results

Market


Domestic brokerage house Anand Rathi has maintained Buy ratings on specialty chemical stocks Ami Organics and Laxmi Organic Industries after their Q3 results. Ami Organics and Laxmi Organic shares have declined over 18% and 10% respectively in a month.

Laxmi Organic Industries Limited reported revenue growth from operation of 97.4% year-on-year (YoY), whereas it witnessed EBITDA growth of 75.4%. The chemical manufacturing company’s management expect the margin to sustain on back of cooling raw material prices.

“The company has de-risked business model with diversified customer base and portfolio across industry as well as presence across various geographies. We expect the growth momentum to continue in the medium term supported by ongoing strong Capex plans,” the brokerage said in a note. It has maintained its Buy rating on Laxmi Organic stock with revised target price of 535 per share.

On the other hand, Ami Organics Limited has reported a growth of 53.5% in its consolidated revenue. The performance wan driven by robust growth in core Pharma Intermediary business as well as stronger growth in Specialty Chemicals business. 

The marginal decline in operating performance was mainly attributable to lower margins in Gujarat Organics business on cost front, Ami Organics witnessed cost pressure but was able to pass on costs increase. Going ahead the company plans to increase its utilisation levels at its newly acquired facility and further plans to incrementally add capacities to aide growth.

“With the presence in high growing and niche markets Ami Organics Limited is set to continue to post better growth in mid term. We have incorporated current financials and updated our numbers for the company. We continue to remain positive on the stock and maintain our BUY rating on Ami Organics shares with a target price of Rs.1,354 per share,” Anand Rathi added.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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