Arihant Capital has given Buy recommendation for Heranba Industries with a target price of Rs. 1073 in its research report issued on Aug 16, 2022
Arihant Capital’s research report on Heranba Industries
Heranba Industries Ltd. is a crop protection chemical manufacturer, exporter and marketing company. The manufacturing facilities are located in Vapi and at Sarigam near Vapi. It is currently expanding its capacity at Sarigam and also possess additional land bank at Saykha, Dahej for future capacity expansion. The company announced its Q1FY23 results, where-in the top-line and bottomline were below estimates. The company faced challenges on the cost front with raw material cost inflation. Also, the lock-down in China hurt its major export market and negatively affected the growth in revenues. Due to pressure on both the company operations and cost front, it generated negative cash flow from operations in Q1FY23, although the quantum was minor in nature in the range of INR 100 to 150 million.
Considering the future growth drivers, we continue to value the company at a P/E multiple of 15x its FY24E EPS of INR 71.6 and maintain our Target Price of INR 1,073 per share. Accordingly, we reiterate our BUY rating on the shares of Heranba Industries Ltd.