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HDFC Securities Initiates Coverage On This Chemical Stock With Buy Recommendation

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Leading brokerage firm HDFC Securities has recommended investors to buy chemicals sector stock, Ami Organics Ltd with a target price of Rs 1160 apiece. The current market price of the stock is Rs 969 apiece with an intraday decline of 2%. If you buy the stock today at the CMP, you can get potential 20% return.

 

According to the analyst, "the company's near-term growth shall be fueled by its consistent investments in R&D, expansion of its speciality chemicals' portfolio and rising utilisation of the acquired Gujarat Organics facility." Check key takeaways below:

1. Ami Organics Stock Performance & Return

1. Ami Organics Stock Performance & Return

The last trading price of the stock is Rs 969 apiece with 52-week high at Rs 1182 apiece and 52-week low at Rs 764 apiece, respectively. The company has a market capitalisation of Rs 3530 crore. The stock declined 1% in last 1-year and gained 4% in last 5 years.

2. Ami Organics Focus

2. Ami Organics Focus

Ami Organics' focus since inception has been on building its technical and R&D capabilities. The company works very closely with its clients while developing its molecules. This limits competition and nurtures relationships in turn building a loyal customer base.

The company has around 380 new products in its pipeline for its advanced pharmaceutical intermediates business, that provides it growth visibility till FY35.

3. Near Term Growth
 

3. Near Term Growth

The company's near-term growth shall be fueled by its consistent investments in R&D, expansion of its speciality chemicals' portfolio and rising utilisation of the acquired Gujarat Organics facility.

The company has launched two core electrolyte additives for cells used in energy storage devices. The company's foray into electrolyte additive manufacturing could act as a trigger for its sustainable growth.

4. Valuation

4. Valuation

According to HDFC Securities, "We initiate coverage on Ami Organics Ltd (AOL), with a BUY recommendation. Our DCF-based target price of INR 1,160/share (WACC of 11% and terminal growth rate 6%) implies an upside of 17% from the current level. The stock is currently trading at 32.4x FY24E EPS. We expect AOL's PAT to grow at a 26% CAGR over FY22-25E, led by a 26% CAGR in EBITDA.

5. About Ami Organics

5. About Ami Organics

Ami Organics Limited is committed to the health care industry by supporting the development and commercialization of pharmaceutical intermediate products.

Built on a foundation of highly focused and research-driven healthcare facility, Ami Organics Limited firmly believes in extending the services to maximize the impact on the global pharmaceutical industry. Ami Organics Limited develops Advance Pharma Intermediates for Active Pharmaceuticals Ingredients (APIs) to serve as many people as possible.

Recently Ami Organics has acquired two manufacturing facilities of Gujarat Organics Limited situated at Ankleshwar and Jaghadia to strengthen & enhance its speciality and fine chemical portfolio to enter Agrochemical, Cosmetics & Polymer Industry, according to its official website.

Disclaimer

Disclaimer

The stock has been picked from the brokerage report of HDFC 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 taking any investment decision.

Story first published: Tuesday, December 6, 2022, 23:14 [IST]
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