ICICI Direct has given Buy recommendation for Sudarshan Chemical recommended buy rating on the stock with a target price of Rs 775 in its research with a target price of Rs. 775 in its research report issued on Jun 01, 2021

ICICI Direct’s research report on Sudarshan Chemical

Sudarshan’s Q4FY21 results were better than our estimates on the revenue, net profit front while margins were lower mainly due to a sharp increase in intermediates price. Revenues grew 28.4% YoY to Rs 576.5 crore led by 32.5% growth in pigment to Rs 532.6 crore amid strong volume. EBITDA margins improved 315 bps YoY to 15.2% mainly due to operational leverage being partially drag by cost inflation. Subsequently, EBITDA grew 62% YoY to Rs 87.5 crore. PAT grew 95.6% YoY to Rs 53.4 crore amid a strong operational performance, lower depreciation and higher other income.

Outlook

We maintain BUY recommendation with a target price of Rs 775 (26x FY23E EPS of Rs 29.8, earlier target price Rs 605).

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