Date: 10 Oct 2023
Anupam Rasayan Ltd (ARL), established in 1984, is one of the leading companies engaged in the custom synthesis and manufacturing of speciality chemicals in India. It has two business verticals:
• Life sciences (90% of the revenue), which caters to agrochemical, personal care and pharma
• Other speciality chemicals (10% of the revenue), which includes pigment & dyes, polymer additives, etc.
Exports contribute over 60% of ARL’s total business, while the rest comes from the domestic market. The company operates 6 manufacturing facilities in Gujarat with an aggregate installed capacity of 23,438 metric tonnes (MT). ARL has a dedicated in-house R&D facility recognized by The Department of Scientific & Industrial Research. Benzene derivates and phenol are the key raw materials used, of which 20-25% are imported.
We expect overall revenues / EBITDA / PAT to grow at a CAGR of 25.7% / 25.9% / 42.5% to Rs.1,050 cr / Rs.269 cr / Rs.153 cr, respectively, by FY23. EBITDA and net margins are expected to improve by 11 bps and 459 bps to 25.6% and 14.6%, respectively, over the same period. Consequently, return ratios RoE and RoCE are also expected to improve by 26 bps and 277 bps to 9.2% and 8.4%, respectively, by FY23.
At the higher price band of Rs 555 per share, ARL is valued at 36.1X FY23 earnings. We recommend a SUBSCRIBE for listing gains.