Anand Rathi: Buy This Chemical Stock For The Potential Upside Of More Than 27%

Anand Rathi, a leading brokerage firm, is highly bullish on the low market cap chemical industry. The brokerage firm has suggested buying Heranba Industries for a target price of Rs. 745.

The stock is currently in a downtrend in the chart; however, it is heading to the upside for a reversal with strong momentum. The stock has the potential to go more than 27% from the current market price, according to the latest report of Anand Rathi.

Here is a detailed breakdown of the latest report of the Anand Rathi on Heranba Industries.

Outlook of Heranba Industries

Heranba Industries Ltd. is one of the leading Agrochemical manufacturers in India. The company, incorporated in 1994, produces various agrochemicals, including herbicides, insecticides, fungicides, and public health products for pest control.

It is a low market capitalization company with a market capitalization of Rs. 2,341 Crore. The current market price is Rs. 585, with an all-time low of Rs. 480 and an all-time high of Rs. 836.

Key Reasons For Growth of Heranba Industries

‘The company's construction work for its Sarigam expansion is ongoing and will soon reap the same benefits. The company intends to capitalize on opportunities generated by various technicals going off patent in the coming years by manufacturing and supplying generic variants of the technicals in the highest regulated markets of the United States of America and Europe.

The company's management gave an annual revenue growth guidance for FY23 of ~16% and EBITDA margins of ~17%.' Says the latest report of Anand Rathi.

Buy Call of Anand Rathi on Heranba Industries

According to the latest report of Anand Rathi, ‘We are positive on Heranba Industries Ltd, the company has a diverse product range, strong margins, strong balance sheet, capacity expansion and further opportunities from off-patent products in highly regulated markets. We maintain a BUY rating on the stock with a revised target price of ₹745 per share.'

Key Risks on Buy Call of Anand Rathi

As per the report of Anand Rathi, there are 4 risks on the buy of Heranba Industries. The report mentions,

• ‘Market & Industry Risk.
• Liquidity Risk.
• Credit Risk.
• Logistic Risk.'