Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Fine Organic Industries Results Review - In-line performance - HDFC Securities

Posted On: 2021-08-19 10:13:25 (Time Zone: UTC)

Mr. Nilesh Ghuge, Institutional Research Analyst, HDFC Securities and Mr. Harshad Katkar, Institutional Research Analyst, HDFC Securities

Our BUY recommendation on Fine Organic Industries (FOIL) with a target price of INR 3,480 is premised on (1) constant focus on R&D, (2) diversified product portfolio, (3) capacity-led expansion growth opportunity, and (4) leadership in oleo-chemical based additives in the domestic and global markets with a loyal customer base. We expect FOIL's PAT to grow at a 41% CAGR over FY22-24E, led by a 37% CAGR in EBITDA. In the absence of any major Capex in the coming years, the RoCE would expand from 16.7% in FY22E to 25.3% in FY24E. Q1 EBITDA/APAT were 1/2% above our estimates owing to a 7% rise in revenue, higher-than-expected other income, lower-than-expected tax outgo, offset by higher-than-anticipated other expense.

Financial performance: Revenue grew 11/49% QoQ/YoY to INR 3.6bn. Exports continue to gain strong traction, while domestic business is impacted by the lockdown restrictions. The contribution of exports to the total revenue has increased from 55% to 62% currently. Gross margin came in at 32.3% (-114/-673bps QoQ/YoY) in Q1 on account of higher raw material costs and higher freight costs. FOIL has been instrumental in passing through the hike in raw material prices to its customers, and has now reworked contracts where the customers pay freight rate existing as on the shipping date. EBITDA came in at INR 5.2bn, +7/-1% QoQ/YoY with EBITDA margin coming in at 14.5% (-45/-732bps QoQ/YoY) in Q1. APAT came at INR 3.6bn (+13/+26% QoQ/YoY) in Q1.

Joint venture: FOIL has made an investment by way of acquisition of 22,500 ordinary shares at a par value of THB 100 per share in Fine Organic Industries (Thailand) Co., Ltd. which is a JV formed to manufacture specialty chemical products and supply, export and distribute such products. FOIL holds a 45% stake in this JV.

Change in estimates: We cut our FY22/FY23E EPS estimates by 6.2/4.1% to INR 46.1/66.1 per share to factor in the overall performance of Q1, change in our Capex assumption, and incorporation of the annual report of FY21.

DCF-based valuation: Our price target is INR 3,480 (WACC 10%, terminal growth 4.5%). The stock is trading at 42.9x FY23E EPS.

Shares of Fine Organic Industries Limited was last trading in BSE at Rs. 2841.2 as compared to the previous close of Rs. 2820.65. The total number of shares traded during the day was 1983 in over 807 trades.

The stock hit an intraday high of Rs. 2863.3 and intraday low of 2805.05. The net turnover during the day was Rs. 5600999.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Automobile Sector - Monthly Quick View - Aug'21 - Mixed Performance across Segments - Reliance Securities

Axis Securities initiating coverage on ICICI Securities

Company Update - Minda Corporation - Q1FY22 - ICICI Direct

Quant Pick - PVR Ltd - ICICI Direct

Quant Pick - ONGC - ICICI Direct

Peak in the headline wholesale inflation is behind us - WPI August 2021 - Acuité Ratings

Sansera Engineering - IPO - Strong Outlook with Steady Cash Flow - Reliance Securities

APL Apollo Tubes - Journey from a semi-commodity player to a branded one - HDFC Securities

Nazara Technologies Ltd - Upbeat in medium-term, Uncertain over Long-term - YES Securities

IPO Review - Sansera Engineering Ltd - ICICI Direct

Overall index is still 0.3% lower than the pre-pandemic levels - IIP July 2021

YES SECURITIES on Monthly General Insurance & Mutual Funds Data

India urban logistics spaces expected to cross 7 million sq. ft by 2022: JLL

Neogen Chemicals - Breaking into the next orbit with a bang - HDFC Securities

Gladiator Stocks - Bharti Airtel Ltd - ICICI Direct

Gladiator Stocks - V-Guard - ICICI Direct

Balkrishna Industries - Industry export growth accelerates - ICICI Securities

HDFC Life Insurance - Exide Life Acquisition - Maintain ADD - YES Securities

Gladiator Stocks - Grindwell Norton - ICICI Direct

Gladiator Stocks - Godrej Properties - ICICI Direct

Monthly Auto Volumes - August 2021 - ICICI Direct

Stock Tales - Easy Trip Planners - ICICI Direct

IPO Review - Vijaya Diagnostic Centre Ltd - ICICI Direct

AU Small Finance Bank - Attrition at top level remains key challenge; business momentum sustained in Jul/Aug'21 - ICICI Securities

Gladiator Stocks - State Bank of India - ICICI Direct

Gladiator Stocks - PNC Infratech - ICICI Direct

Vijaya Diagnostic Centre Ltd - IPO Note - YES Securities

Consumer Durables Sector - Lockdown mars performance yet again - Institutional Research Desk at HDFC Securities

75% of the employees today want to be in office at least once a week as compared to 52% in October 2020: JLL

Gladiator Stocks - Safari Industries - ICICI Direct

Gladiator Stocks - Interglobe Aviation - ICICI Direct

IPO Review - Ami Organics Ltd - ICICI Direct

Q1FY22 GDP - 31st Aug 2021 - Acuité Ratings & Research

Avanti Feeds - Higher input prices hurt margins - ICICI Securities

Company Update - Restructuring - Aarti Industries - ICICI Direct

Q1FY22 Company Update - MM Forgings - ICICI Direct

Company Update - Arvind Fashions - ICICI Direct

Zomato - Can margins and multiples surprise? - ICICI Securities

Ujjivan Small Finance Bank - Top management change and lumpy provisioning concern to weigh on valuation in near term - ICICI Securities

Bharat Dynamics - Guided missile systems to drive orderbook and profit growth - ICICI Securities

Economy - Continued accommodation necessary despite inflationary risks: MPC minutes - ICICI Securities

InterGlobe Aviation - Annual report analysis: Liquidity management remains the mainstay in anticipation of traffic recovery - ICICI Securities

General insurance - Health remains dominant growth driver; Strong all-round performance by Bajaj Allianz - ICICI Securities

Earnings Wrap Q1FY22: Resilient earnings, limited impact of second Covid wave - ICICI Direct

Power Plus Sector Update - July witnessed strong ~10% generation growth - HDFC Securities

Information Technology Sector Update - 'Hit Refresh' - HDFC Securities

Maintain ADD on JK Cement - Healthy performance - HDFC Securities

Maintain BUY on Star Cement - Margin recovers on pricing gain - HDFC Securities

Maintain BUY on Sadbhav Engineering - Long road to recovery - HDFC Securities

Poonawalla Fincorp - Business transformation on cards; a turnaround play - ICICI Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020