Chemicals Sector Small Cap Stock To Buy, Likely To Give Up To 37% Return, Says Nuvama

Brokerage firm Nuvama has a "Buy" on Rossari Biotech Ltd. with a revised target price of Rs. 926/share. If you buy the stock at the current market price, it is likely to give up to 37% robust gains, considering the given target price by the brokerage firm. Rossari Biotech is a Chemicals Sector small-cap stock with a market valuation of Rs. 3,749.19 crore.

The mid-term outlook remains positive, maintain 'BUY'

The brokerage said, "We are positive on ROSSARI's R&D capabilities, which has been the key driver behind several launches. The correction in the stock is overdone. The margin trajectory will be a key monitorable in coming quarters.
It added, "Earnings growth in the medium term will be led by: i) higher volumes as plant utilisation increases from ~55%; ii) better availability of raw materials, iii) visible signs of a recovery in the textile sector, iv) healthy growth prospects in the ANH segment, and v) synergies from Unitop and Tristar in new product development."
It further added, "We expect performance to remain slightly soft in Q1FY24 and risk of a delay in the optimisation of its subsidiaries. We have cut our FY24/FY25 estimate by 21%/13% to adjust for higher than estimated depreciation and taxes but maintain our 'BUY' rating with a revised TP of INR926 (earlier INR1,115), based on 25x FY25E earnings."

Stock Outlook & Returns

On Friday, the stock of Rossari Biotech closed 1.63% down at Rs. 679.75/share. It recorded its 52-week low at 536.35/share and 52-week high at Rs. 1052.85/share, respectively. The stock has fallen 1.03% in a week, whereas it jumped 12.17% in the past 1 month. It has fallen 24.51% in the past 1 year. The stock has fallen 8.35% since its listing. It was listed on 23 July 2020.

Disclaimer - The stock has been picked from the brokerage report of Nuvama. 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 consult with certified experts before making any investment decision.