Buy This Multibagger Chemicals Stock For Further Upside Of 33%

The markets have taken the RBI's accommodative stance in a good spirit and ended with Nifty reclaiming 17600 levels. Now amid such a landscape and the looming threat of the US quickening its tapering timeline, Edelweiss has recommended a 'Buy' on the stock of chemicals company for good returns.

Buy Balaji Amine for a target of Rs. 4150, implying potential upside of 33%

The brokerage has maintained the buy on the rationale that there is seen availability of incremental capacity of DMF, contribution from acetonitrile plant and easy availability of RM for BSC. The demand outlook also remains strong given the robust standalone volume growth guidance of 10-15% in Fy23.

The management anticipates good revenue growth in 4QFY22 on sequential basis.

 

Performance of Balaji Amines in 3Qfy22

Strong sales growth has been reported in the review period supported by increased realisations as well as better performance by subsidiary firm Balaji Specialty Chemicals (BSC). Revenue came in higher by 44% YoY, while EBITDA also increased 35%. PAT also increased both sequentially and YoY to Rs. 90 crore.

Brokerage’s take on Balaji Amines

Edelweiss maintains bullish stance on the company and suggest to "maintain 'Buy' based on its strong performance in 3QFY22, BAL's management upward revised its FY22 revenue guidance to INR2,000cr+ and expects INR 2,500cr+ in FY23, driven by the speedy ramp-up of the DMC plant owing to strong demand from the EV market and import substitution. We remain positive on BAL due to (i) increase in contribution from better margin products such as DMF and acetonitrile following debottlenecking, (ii) commercialisation of DMC and propylene glycol capacity by Q1FY23, (iii) strong demand for BSC's products leading to improvement in utilisation and realisations and (iv) anticipation of more capex announcements (such as capacity expansion of methyl amines, DMF, DMC plant) in the coming quarters to accelerate the next leg of growth. We maintain BUY with a revised target price of INR4,150", notes the brokerage in its report.

Disclaimer:

The stock listed is taken from the report of Edelweiss and is should not be misconstrued as a report to nudge you to buy into this scrip. Remember stock market investing being market linked poses financial loss risk.

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