Anand Rathi has given Buy recommendation for Sharda Cropchem with a target price of Rs. 835 in its research report issued on May 16, 2022
Anand Rathi’s research report on Sharda Cropchem
On 24% volume and 25% pricing growth, Sharda’s revenue/PAT grew 49%/52% in FY22. Management talked of 15-20% revenue growth in FY23 with a 20-22% EBITDA margin supported by strong agri demand globally. We are positive about Sharda’s future performance, considering its focus on registrations, rising share of high margin products and deeper penetration in markets. Further, internally-funded capex and FCF would strengthen its balance sheet. We expect its revenue/profit to clock 15%/16% CAGRs over FY22-24.
The stock trades at 14x FY23e and 12x FY24e earnings. We maintain our Buy rating, though with a revised TP of Rs835, valuing the stock at 16x FY24e earnings. We expect high growth momentum, a strong balance sheet, free cash-flows and strong return ratios over FY22-24.