Omkar Speciality chemicals Ltd - Q4FY13 Result - Msearch

Recommendation: Maintain positive outlook.

Omkar Speciality chemicals Ltd (OSCL) is a Mumbai based leading Manufacturer and Producer of Specialty Chemical Intermediates, promoter by Mr Pravin. Herlerkar. It has a diverse portfolio of over 100 products, both organic and inorganic compounds used in different industries like pharmaceutical, glass, agrochemicals, poultry, paints and dyes, electroplating, textiles, cosmetics and ceramic. The company is a leader in niche value-added organic as well as inorganic chemicals derived from iodine, molybdenum, selenium, cobalt and tartaric acid.

Result Update Q4FY13:

Omkar speciality Q4 results were inline with our expectation; Topline grew up by 28% to Rs 52.4 Cr from Rs 41 Cr on YoY basis mainly on the back improvement seen in Export segment, largely consisting of high value-added products, grew by 82% y-o-y in Q4FY13

EBITDA margin remained flat on YoY at 21.4% from 21.2% as the benefit of better product mix in high value-added products. PAT was under pressure mainly on the back of higher depreciation effects and higher tax provision during the quarter; for the full year, the tax rate was 31%.

For the Audited full year, net profit rose by 29% to Rs 20.56 cr in the year ended March 2013 as against Rs 16 cr year ended March 2012. Sales rose 27% to Rs 211 cr in the year ended March 2013 as against Rs 166 cr during the previous year ended March 2012.

MView: Going forward we believe that the performance will be backed by capacity growth which is inline with our expectations. We see very less small pharma intermediaries having fundamental growth potential to grow more than the industrial growth and Omkar is one among them. On valuation parse at the current market price of Rs 115, the stock is trading at PE of 8.7x times to its FY14E earnings of Rs 13.2 on a conservative basis. Hence we believe performance to translate into healthy growth in forthcoming earnings. We continue to remain positive and expect healthy gains from the current levels with a target of Rs 140 on short to medium term horizon.

Source : Equity Bulls

Keywords