Generic agrochemicals company Meghmani Organics reported strong Q1FY15 numbers.It reported revenue and EBITDA growth along with turnaround on net profit front. Net profit grew to Rs 7.8 crore v/s net loss of Rs 3.6 crore in the corresponding quarter last fiscal. Its closing price is Rs 17.72 in previous session.
Top line grew 22 per cent to Rs 312.7 crore, Year-on-Year (YoY) and EBITDA went up 20 per cent to Rs 49.9 crore, YoY on account of higher revenue growth, partially offset by rise in material cost.
According to the management, the company is seeing a business turnaround due to capex investment of Rs 130 crore. It is focussing on branded business in agro chemicals space and is looking to expand it in overseas & domestic markets. It has set a target of Rs 600 crore for the agro chemicals segment.
The company is expecting capacity utilisation to go up to 80 per cent from 60-65 per cent currently. It is expecting a topline of Rs 1,550 crore & EBITDA of Rs 250 crore for FY15. It sees PAT to be around Rs 55 crore in the same period.
"Meghmani stock has been trading at lower 1-year forward EV/EBITDA multiple of ~3.9x. With revival in business cycle, we have assigned 5.9x EV/EBITDA multiple (21 per cent discount to global peers) to arrive at FY16E based price target of Rs 34/share," the brokerage said.
Top line grew 22 per cent to Rs 312.7 crore, Year-on-Year (YoY) and EBITDA went up 20 per cent to Rs 49.9 crore, YoY on account of higher revenue growth, partially offset by rise in material cost.
According to the management, the company is seeing a business turnaround due to capex investment of Rs 130 crore. It is focussing on branded business in agro chemicals space and is looking to expand it in overseas & domestic markets. It has set a target of Rs 600 crore for the agro chemicals segment.
The company is expecting capacity utilisation to go up to 80 per cent from 60-65 per cent currently. It is expecting a topline of Rs 1,550 crore & EBITDA of Rs 250 crore for FY15. It sees PAT to be around Rs 55 crore in the same period.
"Meghmani stock has been trading at lower 1-year forward EV/EBITDA multiple of ~3.9x. With revival in business cycle, we have assigned 5.9x EV/EBITDA multiple (21 per cent discount to global peers) to arrive at FY16E based price target of Rs 34/share," the brokerage said.
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