Arihant Capital has given Buy recommendation for India Glycols with a target price of Rs. 1056 in its research report issued on Aug 16, 2022
Arihant Capital’s research report on India Glycols
India Glycols Ltd (IGL) reported strong numbers, Q1FY23 revenue stood at INR 808cr (+24.2% YoY/+25.8% QoQ); below our estimates of INR 816cr. Gross Profit stood at INR 277Cr (+40% YoY/-0.9% QoQ), Gross margins increased by 286 bps to 14.9% vs 12.0% in Q1FY22. The margin improvement mainly because of raw material cost decreased in terms of sales. The raw material cost in terms of sales stood at 65.7% vs 69.6% in Q1FY22. EBITDA stood at INR 63cr (+13.8% YoY/-21.5% QoQ); below our estimates of INR 67cr. EBITDA margin decreased by 71 bps to 7.7% vs 8.4% in Q1FY22. PAT stood at INR 28cr and PAT Margin stood at 3.4% vs -5.9% in Q1FY22.
Outlook
We have a “BUY’ rating at a TP of INR 1,056 per share; valued at PE multiple 10.9x and its FY24E EPS of INR 100.6; an upside of 32.2%.