Buy This Small Cap Specialty Chemicals Stock For Target Price Of Rs 147: Axis Securities

The brokerage firm Axis Securities has given a buy call to Camlin Fine Sciences Ltd (CFS). for a target price of Rs 147 apiece. It is a small-cap company with a market price of Rs 2,068.98 crore.

Camlin Fine Sciences is engaged in the Business of Speciality Chemicals, it is a vertically integrated company, engaged in the research, development, manufacturing, commercializing, and marketing of specialty chemicals and blends in its 9 manufacturing facilities around the world & 1000+ customers across 80 countries.

Its key product segments include Blends (33% of Revenue), Shelf-life Extensions Products (24%), Performance Chemicals (43%) & Aroma Chemicals (1%). Currently, CFS has 60+ Products under shelf-life Extension solutions an industry with total market size $6-7 bn.

Stock Outlook

On NSE, the Current Market Price (CMP) of stock is Rs 131.75 apiece. The 52-week low of the stock is Rs 97.10 apiece and the 52-week high is Rs 213 apiece, respectively.

According to the brokerage's estimated target price, the stock is likely to gain 12% if the stock is bought at the CMP. 
 

Returns on Investment

The stock over the past 1 week has fallen 3.62% whereas, in the past 1 month, it surged roughly 9.38%. In the past 3 months, the stock has given a 27.23% of positive return. Over the past 1 year, it has given a negative return of 26.05%. Over the 3 and 5 years, the stock gave positive returns of 128.14% and 77.08%, respectively.

Company may be able to capitalize on demand supply mismatch is sustained in Vanillin market

The company has began with commercial production of Vanillin in current quarter is expected to ramp up the utilisation levels in coming quarter. Currently the prices of Vanillin where high which is expected to benefit the company in near future.

Benefits of Dahej expansion to kick in

Diphenol captive requirement in India will be met through the Dahej facility which will lead to significant reduction in logistics, packaging, labour and electricity costs, leading to improved operational efficiencies and lower turnaround time. This will also mitigate single location risk & improve overall operating margins.

Improving product profile

CFS plans to add high-margin and value-added downstream products in the performance chemicals and shelf life solutions segments by captively using hydroquinone and catechol produced at Dahej reducing its impact on margins.

Recommendation

The brokerage said, "We recommend a BUY rating on the stock with a near term Target Price of Rs 147, implying an upside of 14% from CMP."

Disclaimer

The stock has been picked from the brokerage report of Axis Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.